The Importance of a Durable Power of Attorney
Perhaps the most important document in any estate plan, a durable power of attorney allows you to appoint someone as your attorney-in-fact to make decisions for you when you are unable to act for yourself (the legal term would be incapacitated in WA state)
What does Durable mean and Why is it so important?The power of attorney comes from English common law and originally when a principal (the person signing the POA) gave authority to an agent (the person appointed to act under the power of attorney) the authority of the agent ended when the principal became incompetent or incapacitated. For example, I sign a power of attorney and give authority to my wife to make decisions for me. A few years later, I suffer a stroke and am now unable to make decisions for myself. Under the old English common law, my power of attorney would also terminate and my wife could no longer act on my behalf.
A durable power of attorney survives the incapacity of the principle. Under the example above, when I suffer a stroke, my wife will still be able to act on my behalf. All states now have a durable power of attorney statute but the power of attorney must specifically state that it is durable or the law will presume the power of attorney is not durable. This could lead to serious consequences, like a need for a guardianship.
What authority does a power of attorney usually grant?A General Durable Power of Attorney includes authority to make both financial and health care decisions. This means that the person appointed (the attorney in fact) has the authority to handle your financial affairs and make medical decisions on your behalf. This is why it is essential that the person appointed be someone that you trust to make these decisions for you. It is also possible to split the two areas of authority out into separate powers of attorney. If you have a child you think would handle the financial decisions better, you could appoint that child to make decisions for you with a Financial Durable Power of Attorney and give your Health Care Power of Attorney to another child with medical experience.
Effective immediately or Springing?In general, there are two types of Power of Attorneys. One is effective immediately, and this means that as soon as you sign your power of attorney, the person appointed has the authority to act and make decisions on your behalf. The other is called a springing power of attorney, this type of power of attorney becomes effective upon incapacity and usually requires one or two doctors to sign a letter stating that you are unable to manage your financial affairs or make health care decisions.
Which one is appropriate usually depends on your current life circumstances and your level of comfort with giving authority to another person to make decisions for you.
Guardianship and the Least Restrictive AlternativeThe most important reason to execute (sign) a power of attorney is to avoid a guardianship. When a person has not signed a power of attorney and then suffers a stroke, dementia, or becomes incapacitated for any other reason, a guardianship is the only way that a person can be appointed to make needed decisions on their behalf. Guardianship is an intrusive and expensive proceeding which often causes a lot of turmoil for families. One of the things that the court will look at when deciding whether or not to appoint a guardian is did the person sign a power of attorney. A power of attorney is considered a least restrictive alternative to guardianship, and if everyone is working well together, can avoid a guardian being appointed. If a guardianship does become necessary, a section can be put into the power of attorney that requests that a certain person be appointed as guardian which the court will respect unless good cause is shown why that person cannot act as guardian.