I had a client ask me the other day what makes a durable power of attorney
different than a power of attorney.
A power of attorney is used when one person (the principal) wants to give
authority to another person (the agent) to act on behalf of the principal.
Traditionally, a power of attorney is no longer valid once the principal
becomes incapacitated. The durable power of attorney was created to address
this problem. With a durable power of attorney, the agent can still act
on behalf of the principal even if the principal losses legal capacity.
A regular power of attorney is often used for a specific transaction in
which an agent needs to do a specific act for a principal. For example,
if two people are selling jointly owned real estate, but only one of them
can attend the closing, the seller who cannot attend the closing may give
a power of attorney to authorize the other seller to sign the closing
documents on his behalf. Once the documents are signed, the specific act
is completed and then the power of attorney is no longer valid.
A durable power of attorney is used most often as a way to proactively
plan ahead for possible incapacity. Under the durable power of attorney,
the agent is given authority to perform a wide variety of actions on behalf
of the principal. The durable power of attorney allows the principal to
say in advance who will act for him and how.
If you become incapacitated and don’t have a durable power of attorney,
usually your state has a law that will describe how an agent is chosen
for you (the “default option”). In Florida, the default option
is guardianship. In a guardianship, the court chooses who will act for
you and what they are authorized to do on your behalf.
In helping people decide if they want to put a durable power of attorney
in place I urge them to imagine themselves in a room full of people with
only one TV and one remote control. I have them honestly consider if it
would drive them crazy to have someone else decide which channel on the
television they have to watch.
If you put a durable power of attorney in place, then you are in charge
of your own remote control. If you don’t put a durable power of
attorney in place, then you have handed the remote control over to the
state of Florida and will be stuck watching whichever channel the state,
through the default plan, chooses for you.