What Is a Durable Power of Attorney?

What Is a Durable Power of Attorney?

by Edward A. Haman, Esq., August 2017

Many people create a power of attorney in order to enable a trusted person to handle their affairs if they become mentally incapable of doing so. To accomplish this goal, the document must be a durable power of attorney.

What Is a Power of Attorney?

A power of attorney is a legal document that gives someone the authority to act on your behalf. The person who gives the authority is called the principal, and the person who is given authority is called the agent or the attorney-in-fact. There are basically three types of power of attorney:

General Power of Attorney. This gives someone the authority to act in a broad range of matters, such as buying and selling real estate and personal property, managing your banking and investments, operating a business, handling taxes and lawsuits, and applying for government benefits.

Limited Power of Attorney. Also called a special power of attorney, this gives someone the authority to act only in a limited situation, which you specify in the document.

Medical Power of Attorney. This is a special type of power of attorney that gives someone the authority to make medical treatment decisions for you in the event you are mentally or physically unable to make your own decisions. Depending on the state you live in, you may see this type of document referred to by other names, such as a Durable Power of Attorney for Health Care, Designation of Patient Advocate, Designation of Health Care Surrogate, Health Care Proxy, or something similar.

What Makes a Power of Attorney "Durable"?

Traditionally, a power of attorney would be canceled in four situations: (1) if you specifically cancel (revoke) it, (2) if it has an expiration date, (3) if you die, or (4) if you become mentally incompetent. In more recent times, the durable power of attorney was created to allow it to continue to be in effect after mental incompetency. The word “durable" means that the power of attorney continues to be effective after the principal becomes mentally incompetent.

Being mentally incompetent means that the person lacks the mental ability to make informed decisions, or is incapable of communicating those decisions. In addition to mental illness, this can also be due to disease, or an injury (such as one resulting in temporary unconsciousness or a coma). It may also be referred to as being mentally disabled or incapacitated.

Creating a Durable Power of Attorney

By its very nature, a health care power of attorney is always a durable power of attorney. To make any other power of attorney durable, certain language must be included in the document. This language is typically part of the state law that authorizes durable powers of attorney.

Many states have an officially recognized power of attorney form, often for both financial and medical powers of attorney. These forms will include the language that is needed to make the power of attorney durable. It is important to be sure that any form you use complies with the requirements of the law in your state.

When Does a Durable Power of Attorney Become Effective?

In most states, a durable power of attorney can either become effective as soon as it is properly signed, or it can become effective only if the principal become mentally incapacitated.

To become effective immediately, the document will include language such as: “This power of attorney shall not be affected by my subsequent disability, incapacity, or incompetence."

To make it only effective in the event of mental incapacity, it will include language such as: “This power of attorney shall become effective upon the date of my disability, incapacity, or incompetence." In this situation, you would not only be creating a durable power of attorney, but also a springing power of attorney (because it “springs" into effect upon a future event).

Durable Power of Attorney Sample

Below is a simplified example of a durable power of attorney. It is a limited power of attorney, since it only covers a single transaction. A general durable power of attorney would be longer, since it would describe the various types of transactions it covers. The paragraph shown below in bold type is the language that makes this a durable power of attorney.

Limited Power of Attorney

I, Theodore Cleaver, 211 Pine Street, Mayfield, MI 49666, do hereby grant a limited power of attorney to Edward Haskell, 595 Maple Drive, Mayfield, MI 49666, as my attorney-in-fact (agent), giving said agent the full power and authority to undertake and perform the following acts on my behalf to the same extent as if I had done so personally:

To bargain for the sale of, sell, transfer, and convey title to, my 1959 Plymouth Sport Fury automobile, VIN #M246100666.

The authority of my agent shall include such incidental acts as are reasonable and necessary to carry out and perform the authorities and duties stated herein.

This power of attorney shall become effective immediately upon the date of execution, and shall not be affected by my subsequent disability, incapacity, or incompetence.

This power of attorney may be revoked by me at any time, and will automatically be revoked by my death; PROVIDED that any person relying on this power of attorney before or after my death shall have full rights to accept the granted authority of my agent until receipt of actual notice of revocation.

Signed this 13th day of June, 2017.

Theodore Cleaver (signature)