There are a lot of things to consider when it comes to estate planning. One of the most important decisions you’ll have to make is whether or not to create a Durable Power of Attorney (DPOA) and/or a Power of Attorney (POA). While both documents serve similar purposes, there are some key differences that you should be aware of before making your decision.
In this article, we’ll take a closer look at the Durable Power of Attorney vs Power of Attorney, and help you understand when you should use each one. We’ll also provide some tips on how to create these documents, as well as what to do if you don’t have either one.
What is a Durable Power of Attorney
A Durable Power of Attorney (DPOA) is a legal document that allows an individual to designate a trusted person to make financial and legal decisions on their behalf. The DPOA can be used in the event that the individual becomes incapacitated or otherwise unable to make decisions for themselves. The individual who is designated as the DPOA is known as the “attorney-in-fact” or “agent.” The agent is typically someone who the individual trusts implicitly, such as a spouse, partner, or adult child.
The agent must be willing and able to handle the responsibility of making decisions on behalf of the individual. The DPOA can be used to give the agent authority over all financial matters, including bank accounts, investments, and property. The DPOA can also be used to give the agent authority to make medical decisions on behalf of the individual. It is important to note that the DPOA does not take effect unless and until the individual becomes incapacitated. As such, it is important to have a DPOA in place before it is needed.
What is a Power of Attorney
A Power of Attorney (POA) is a legal document that allows someone to make decisions on your behalf. This can be helpful in a variety of situations, such as if you are going to be out of the country for an extended period of time, or if you become incapacitated and are unable to make decisions yourself. A POA can give someone the authority to handle your financial affairs, make medical decisions on your behalf, or even just sign documents on your behalf. It’s important to choose someone you trust to be your POA, as they will have a lot of power over your life. If you have any questions about Powers of Attorney, or would like help creating one, you should speak with a lawyer.
How are they different
Durable Power of Attorney (DPOA) and Power of Attorney (POA) are two seen as similar documents with Durable Powers having more long-term effects. DPOAs are used when the person giving power (principal) is incapacitated or unable to make decisions for themselves. The main difference between Durables and POAs is that Durables continue after the principal becomes incapacitated whereas POAs end. This makes Durables more powerful and thus subject to more regulation and abuse.
POAs are used when the person giving power is still able to make decisions and just needs help with certain affairs. Most POAs end when the person giving power dies or revokes the POA. An example of when a Durable would be used is if an elderly person wanted their child to have the ability to sell their house if they became incapacitated and unable to do so themselves. An example of when a POA would be used is if someone is going on vacation and wants someone else to be able to handle their bills while they’re gone.
When would you use one over the other
Durable Power of Attorney vs Power of AttorneyMost people have heard of a Durable Power of Attorney (DPOA), but not everyone knows when it should be used or the difference between a DPOA and regular power of attorney (POA). Durable Powers of Attorney are used when you want to appoint someone to make decisions on your behalf, but you are not sure if you will still have the cognitive ability to do so in the future.
For example, if you are diagnosed with a degenerative disease, you may want to appoint a Durable Power of Attorney now, in case you become incapacitated and are unable to make decisions for yourself later on. A Durable Power of Attorney is also good to have in case you go into a coma or suffer from dementia. A regular Power of Attorney, on the other hand, only lasts as long as you have the mental capacity to make decisions for yourself. Once you lose that capacity, the POA is no longer valid.
Therefore, if there is even a possibility that you may not be able to make decisions for yourself in the future, it is best to choose a Durable Power of Attorney.
What are the benefits of Durable Power of Attorney vs Power of Attorney
There are several benefits to having Durable Power of Attorney vs Power of Attorney. DPOA ensures that your chosen representative can continue to act on your behalf even if you become incapacitated, whereas POA does not. DPOA also gives your representative more flexibility in terms of what actions they can take on your behalf. For example, they may be able to sign contracts, open bank accounts, and sell property on your behalf. Finally, Durable Power of Attorney vs Power of Attorney can give you peace of mind knowing that your affairs are in order in the event that you become unable to make decisions for yourself.
What are the drawbacks of Durable Power of Attorney and Power of Attorney
One downside of Durable Power of Attorney is that it can be abused. The person appointed as Durable Power of Attorney has a great deal of power and authority, and they could use this to their advantage. For example, they could make decisions that are not in your best interest or access your finances without your permission. Another potential drawback is that Durable Power of Attorney does not automatically terminate if you become incapacitated. This means that the Durable Power of Attorney could make decisions on your behalf even if you are no longer able to do so yourself.
Power of Attorney also has some potential drawbacks. One is that it can be revoked at any time by the person who granted it. This means that the person appointed as Power of Attorney could have their authority taken away at any point, which could create confusion and chaos.
Taking everything into account, which one is best for you?
When making the decision of Durable Power of Attorney vs Power of Attorney, you must take into account what is best for your unique situation. A Durable Power of Attorney is a legal document that gives another person the authority to make decisions on your behalf if you become incapacitated.
A Power of Attorney, on the other hand, only applies to financial matters. If you are seeking someone to handle your affairs in the event of your incapacity, then Durable Power of Attorney is the better option. However, if you only need assistance with financial matters, then a Power of Attorney would be sufficient. Ultimately, the decision comes down to what level of authority you are comfortable giving to another person and what type of assistance you need.