Lawyers, doctors, and other advisors uniformly recommend that their clients have a “Durable Power of Attorney,” either for healthcare or financial matters or both. Lucent Law offers both through its Forms & Essentials services, and the Durable Power of Attorney for Healthcare is included in all of our will packages. But what is a Durable Power of Attorney? Why is the word “attorney” in the name? To answer these questions, we’ll break it down a little bit backwards: looking at the word “attorney” first, then a bit about Powers of Attorney in general, and finally how a Durable Power of Attorney is unique.
Isn’t “Attorney” Just Another Word for “Lawyer?”
Contrary to what many people believe, and to the way the word is most commonly used, “attorney” is not synonymous with “lawyer.” An attorney is simply someone who is empowered to act on another person’s behalf with the same effect as if the person had done the act herself. A lawyer is sometimes referred to as an “attorney at law” because a lawyer is authorized to represent clients in court. A person appointed under a Power of Attorney is known as an “attorney-in-fact.” That means the attorney-in-fact is authorized to do things outside of the court system for the person who appointed him or her. By the way, the person who appoints an attorney-in-fact is called the “principal.” And finally, for you grammar geeks, the plural of “attorney-in-fact” is “attorneys-in-fact,” not “attorney-in-facts.”
Powers of Attorney in General
So, a Power of Attorney is simply the document through which a principal appoints an attorney-in-fact to act on his behalf. Powers of Attorney come in a virtually infinite number of variations in the scope, timing, and duration of the attorney-in-fact’s powers. The Power of Attorney itself can grant the attorney-in-fact powers that are very broad or limited to only a single act. The appointment can last only a predefined time, or it can be indefinite. And, the appointment can begin upon execution of the Power of Attorney, or it can begin at some time in the future, whether a defined date or upon some triggering event.
One example of how a Power of Attorney might be used is a Limited Power of Attorney appointing the attorney-in-fact to sign papers to close a real estate transaction on behalf of the principal because the principal is going to be unavailable at the time of closing. This Limited Power of Attorney would specify that the authority of the attorney-in-fact is limited to executing the documents necessary to close the transaction, and would go on to describe the purchase and sale agreement and the real estate involved. Upon completion of the closing, the Limited Power of Attorney would expire, and the attorney-in-fact would have no further authority to act on the behalf of the principal.
Generally, a Power of Attorney will terminate upon the death or disability of the principal. Note that the word “disability” in the context of Powers of Attorney generally means incapable of decision making, for example due to dementia or serious illness, as opposed to physical disability. This type of disability may be permanent or temporary.
Durable Powers of Attorney
Durable Powers of Attorney are different, though. While all Powers of Attorney are terminated by the death of the principal, a Durable Power of Attorney is not terminated when the principal becomings disabled. In fact, Durable Powers of Attorney frequently only become effective upon the disability of the principal.
This ability to survive or become effective upon the disability of the principal is key to the usefulness of a Durable Power of Attorney. While a fortunate few will make it to the end of their lives without experiencing any period of disability, the vast majority of us will at some time need someone to look after our finances or make medical decisions for us because we are unable to do so ourselves. The Durable Power of Attorney allows us to choose the person or persons we want to make those decisions for us in advance, before an emergency or sudden illness prevents us from doing so.
The Durable Power of Attorney even allows the principal to nominate in advance a person to serve as her guardian in the event one is needed. The appointment of a guardian may come up if family members or caregivers perceive that an attorney-in-fact is not adequately looking after the needs of the principal. We will go into more detail on guardianship in a future post.
Do you still have questions about Durable Powers of Attorney? Get in touch with us through the “Contact Us” button at the bottom of the screen.