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2013 4th Edition (Other Editions)


The Durable Power of Attorney effectively delegates to a chosen representative the power to legally conduct your affairs. By selecting some trusted person to exercise this power, you may avoid interruptions of your business and financial matters. Without such an agreement, no one could gain access to your bank account, securities, or any other property in your name without resorting to lengthy legal proceedings.

Although your assets may be substantial, they would be of no help to you or to your family in time of need if they remain in a "frozen" state. A long term confinement, temporary loss of function or an extended business trip could leave the family without financial means.

A Power of Attorney should be tailored to the needs of the individual. It may be a broad "general" power or a "special" power limited only to certain listed acts or items of property. A Durable Power of Attorney may be drawn now in anticipation of future disability. Your attorney may advise that you leave the document with him or her to be released to your "attorney-in-fact" only upon notification of disability or other specific event. In this way, you will be protected from its premature or indiscriminate use.

The most important factor in drafting this versatile instrument is the selection of a capable person as your attorney-in-fact. Ordinarily, a spouse might be most familiar with family needs. However, you should not overlook having a successor designated in your agreement. After all, couples frequently travel together and might be subject to simultaneous risks.

Finally, it is extremely important that the Power be recognized by those who are asked to honor it, such as banks and transfer agents. The well-drawn Durable Power of Attorney will contain an exculpatory clause that frees organizations or people who rely on it from any liability due to revocation, lack of mental competence or death, without actual notice of such events. Such a clause will induce otherwise conservative financial institutions to accept the Durable Power of Attorney without hesitation. Normally, there will be a clause authorizing the filing or amendment of tax returns.

The Durable Power of Attorney for assets and financial matters should be separate from the Durable Power of Attorney for health care. It is also possible to have two such agreements - one for general finances and family matters - and another that deals with a closely held business or executive benefits.

Note: Your legal counsel must be consulted to determine the appropriate form and provisions required, since most states have different rules.

Source: Financial Planning Consultants, Inc.