Having a choice is power. A person has the right to make decisions that best serve their interests and that right deserves protection. More specifically, an individual should be able to make important decisions regarding health and finances to achieve the best possible outcome. Unfortunately there are common situations where a person cannot logically make financial decisions from being incapacitated or from severe illness. So, how do people in these circumstances protect their power of choice? The answer is a Durable Power of Attorney (DPA).
A DPA is a powerful legal tool that allows one person (the “Principle”) to give legal authority to another person (the “Agent” or “Attorney-in-Fact”) to make decisions and act on behalf of the Principle. A person can use a DPA to appoint a trusted party, such as a family member, to make critical decisions on their behalf. The trusted Agent can be legally permitted to manage investments and direct medical care with the Principle’s wishes in mind.
The two major areas where a DPA can be most useful involve Finances and Healthcare. A Financial DPA confers a fiduciary duty on an Agent to act for the Principle in good faith and to best serve their financial interests. The trusted Agent can be given mundane tasks such as depositing Social Security checks, as well as more complex tasks like monitoring retirement investments or filing taxes.
A Healthcare DPA allows a person to plan their health wishes if they are unable to speak for themselves. For example, a Principle can give an Agent the power to discontinue life support or choose another course of medical treatment if they are incapacitated. A Principle can make their wishes explicitly clear by using a “Living Will” or a “Healthcare Declaration” to provide written instructions that the Agent is legally bound to follow. These instructions ensure the Principle receives their desired medical treatment procedures should they fall into a vegetative state.
A DPA is an important tool for protecting yourself, but also your loved ones. If you have not executed a DPA, costly court proceedings called Guardianship and Conservatorship may be needed to obtain decision-making authority. A DPA can prevent this by ensuring greater control and freedom of choice in an affordable manner.