Why is a durable power of attorney for property important?

Through a durable power of attorney for property (POA) your family member appoints an agent of her choice to manage her financial affairs. The agent can be a trusted family member or friend.

There are two types of POAs:

  1. A durable power of attorney for property where the agent is appointed to manage the individual's financial affairs from the day the document is signed.
  2. A springing power of attorney for property that is activated when a person becomes incapacitated. In a springing POA, your family member appoints her agent and then specifies the conditions under which the POA will be activated. For example the document might require that two or more doctors must certify that your family member is incapacitated to activate it. Once activated the springing POA for property is durable or lasts for the person's lifetime.
  3. The rights your family member gives her agent under a POA for property can affects every aspect of her financial life. When your family member chooses an agent for her power of attorney or as a successor trustee for her living trust, she is voluntarily giving that person control. The agent's actions will not court supervised. Many cases of financial elder abuse involve actions by agents appointed by the senior in a POA or revocable living trust. Your family member should assign these responsibilities to someone she trusts.

    Many financial institutions have their own forms for POAs for property. When your family member sets up her POA, contact her bank and brokerage house and complete copies of their version of the power of attorney to prevent future obstacles for her agent.

    Just as important as the legal paperwork are the conversations that go along with the decisions your family member is making. Let other family members know who has been appointed as the successor trustee, executor and agent for your family member's powers of attorney. It’s a good idea for your family member to discuss in general terms how her estate will be divided.

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