A power of attorney is a document where one person or entity (a principal) grants consent authorizing another person or entity (agent) to act on his or her behalf. Essentially, under this arrangement, the agent has consent to act on behalf of the principal in certain situations and is authorized to make decisions which will bind the principal. The extent and scope of the agent’s decision-making power and authority should be spelled out in great detail.
There is a catch. If the principal ever loses capacity the law interpreted this as the principal being unable to consent to the agent’s actions. To give an example, say I own a grocery store. I give one of the grocery clerks a power of attorney to go and buy produce from the market. I give him unfettered discretion in which produce to select and purchase using my money. The law at this point would interpret as me continually giving consent to the clerk to act on my behalf in this task. However, if I were to ever lose “capacity” (something which has a nuanced legal definition, but think of it simply as me being unable to make rational decisions), that continued consent would be deemed as revoked, because I no longer have the mental acuity to consent.
Enter the “durable” power of attorney. Under a “durable power of attorney,” the power of the agent to act on the principal’s behalf continues despite the principal’s incapacity, whether or not a court decrees the principal to be incapacitated. So, in the above example, if the power of attorney was “durable,” the clerk would still nevertheless be able to continue buying produce on my behalf.
Why is this important? Well, it can be applied to many different things, not just a simple arrangement like the one I just used. An aging parent may wish to give a durable power of attorney to a family member so that that person can carry on the affairs of the parent. More specifially, a parent or individual creates a durable power of attorney so that if he or she is ever incapacitated, an agent can make financial and healthcare decisions on behalf of the principal. This is where many advanced healthcare directives come into play. If an individual is in the hospital and unable to make determinations as to his or her medical treatment, a durable power of attorney allows an agent to confer with doctors and medical providers and decide on what the best course of treatment would be. Usually the durable power of attorney spells out specifically what kinds of treatment (or non-treatment) the principal would want in a given situation. Accordingly, the agent’s actions are usually based on what the principal’s wishes would be.
As briefly mentioned, in addition to healthcare decisions, an agent may be authority to handle the principal’s finances. Most people would prefer appointing someone to make such decisions rather than having a court-appointed conservator decide what is best to do with your finances.
An effective durable power of attorney needs to be carefully worded, so be sure to choose an attorney who knows the intricacies of this area of the law. Furthermore, you should exercise extreme care and due diligence in deciding who you would want to appoint as your agent and attorney-in-fact. You could be trusting that person with your life and property.