You Need a Durable Power of Attorney as Part of Your Estate Plan

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Every adult in this country should have a "durable power of attorney," which is one of the four important legal documents everyone should have. The durable power of attorney is just a form agreement used as part of an individual's estate planning.

The durable power of attorney will provide management continuity and control of the individual's assets and business affairs when he or she becomes incompetent or can't manage things for him or herself. If you make out a durable power of attorney, you will be known as the "principal" and the one who will take over for you is called the "agent." A general power of attorney doesn't have a "durability clause," like the durable power of attorney has. The durability clause states that the powers of the agent will endure beyond the incompetency of the principal. A general power of attorney becomes ineffective after the principal becomes incompetent. It finally became obvious that a power of attorney is even more important if a principal cannot function. So, laws were passed which made the power of attorney survive the incompetency of the principal.

The use of a will and revocable living trust may be better understood, but don't dismiss the significance of a durable power of attorney. It is many times more likely that you will be incompetent or otherwise unable to manage your financial dealings next week than it is that you will be dead next week. In the eyes of the law, it is easier to deal with a dead person's assets than an incompetent person's assets.

If a person doesn't have a durable power of attorney, court action is necessary to have them declared incompetent and have an individual appointed as their agent or "conservator." A mechanism or formula should be contained in the durable power of attorney to dictate when the principal will be considered incompetent. If the durable power of attorney is written properly, the family can have the durable power of attorney take affect without any court intervention. A principal can usually be declared incompetent, and unable to manage their business or financial transactions, if two doctors sign a statement affirming that the principal is incompetent.
Usually, a principal will specify that some combination of trusted family members, a religious advisor, or medical specialists can be used to sign off on their incompetency.

The durable power of attorney can give the agent broad powers to take care of the principal's affairs. A person acting as agent under a durable power of attorney can help with not only financial and medical issues, but also religious and social matters of concern to the principal. A "medical power of attorney" only deals with medical issues. An individual has the option of combining the durable power of attorney, Health Insurance Portability and Accountability Act (HIPPA) agreement, medical power of attorney, and living into one master agreement, or keeping them separate.

All adult family members need a durable power of attorney, either combined as described above, or in distinct documents. Just execute the forms and keep them on file. If an individual in your family has a problem, the durable power of attorney can save you time, financial stress, and heartache.

The FREE DVD and book go through estate planning using a durable power of attorney. Eliminate estate taxes and get more asset protection by simply ordering Guaranteed Millionaire plus the FREE DVD, Using the Law to Make Money and Protect Your Assets.

Article Source: http://depositarticles.com/

For more information on the durable power of attorney please visit our website above and get a free 90 minute informational DVD.

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