What Is a Durable Power of Attorney? (Part I) - Law and Daily Life
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What Is a Durable Power of Attorney? (Part I)

Like its name suggests, a durable power of attorney can be a powerful long-term legal tool for managing your healthcare and finances during an emergency or other unexpected situation.

But what exactly can a durable power of attorney be used for, and how does it work? Today in Part I, we'll cover the "whats":

What Is a Power of Attorney, Anyway?

A power of attorney is a legal authorization for one person to make decisions on behalf of another. There are generally three different kinds of power of attorney:

  • A general power of attorney gives the person named as the agent the power to make a wide array of business, medical, legal and financial decisions.
  • A special power of attorney gives the agent the power in a specific instance or limited area.
  • A durable power of attorney remains effective even after a person has become incapacitated due to illness, old age, or another reason. It can be either limited to specific areas or more general.

What Can Be Done With a Durable Power of Attorney?

The two most common uses for a durable power of attorney are for healthcare decisions and financial decisions.

A durable power of attorney for healthcare is often coupled with a living will, both of which are known as advanced directives. While a living will instructs medical personnel on what to do if you are unable to make decisions regarding your medical care, even the most specific living will cannot cover every possible scenario.

A durable power of attorney allows the person granted the power of attorney (who, depending on your state, may be called the "agent," "proxy, attorney-in-fact," or "surrogate") to perform several important functions, such as:

  • Making medical decisions not covered by the living will,
  • Enforcing your healthcare wishes in court,
  • Hiring and changing doctors, and
  • Reviewing medical records.

Some states combine the living will and durable power of attorney for healthcare into a single document called an "advance health care directive."

A durable financial power of attorney gives control of your financial decisions to another person in the event that you are incapacitated. It can be granted to the same person as your power of attorney for healthcare, or to a different person. Depending on the state you live in, this person has different names, but they generally have the same powers, including:

  • Paying your bills,
  • Paying your taxes,
  • Paying medical expenses,
  • Managing real estate,
  • Investing on your behalf,
  • Collecting benefits you are owed,
  • Operating your business, and
  • Hiring a lawyer to represent you.

Now that you've gotten a better idea of what a durable power of attorney can do, you may be wondering when a durable power of attorney takes effect, when it ends, and how to get one drafted. We'll answer those important questions tomorrow in Part II of this blog series.

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