Are you planning to retire soon? You may think it is the perfect time to create a durable power of attorney that will help you navigate the various medical and legal matters in times of need with the support of a qualified, trusted person. However, what you must realize is that a durable power of attorney is not a one-size-fits-all document. It is not always necessary that a durable POA document made for estate-planning purposes will work equally well for Medicaid-planning purposes.
It is advised to talk to your legal support thoroughly about what your durable power of attorney should entail before you proceed with the documentation process.
What Is A Durable Power Of Attorney?
A power of attorney is a legal document that gives another person the authority to act on your behalf when help is needed. For example, a situation where you have been hospitalized and need a family member to sign the checks and pay your medical bills.
When a POA document is made, the one who gives the authority is called ‘the principal’ and the one who takes up the tasks on the principal’s behalf is called ‘the attorney-in-fact’. There are three types of power of attorney.
General Power of Attorney – This POA covers a wide range of matters, including real estate sales and purchases, banking and investments, business operations, as well as taxes and lawsuits.
Limited Power of Attorney – Also known as special power of attorney, this POA works only for a limited situation that you can specify in the POA.
Medical Power of Attorney – This POA covers the medical area, wherein the person with authority makes decisions regarding your medical treatments in case you are mentally or physically incompetent to do so.
If the word ‘durable’ is added to any of these, it means that the power of attorney will continue to be effective even if the principal becomes physically or mentally incompetent.
How Is A Durable Power Of Attorney Different?
As per the traditional practice, a power of attorney is canceled if:
1) You cancel (revoke) the power of attorney yourself.
2) Your power of attorney has an expiration date.
3) You die a natural or untimely death.
4) You become mentally or physically incapacitated to make any legal decisions.
Today, people have another option called the durable power of attorney where the document remains effective even after the principal has become mentally incompetent. Being mentally incompetent means that a person lacks the ability to make informed decisions or communicate his decisions to others. In addition to mental incompetence, one may also suffer from a disease or an injury that can render him in a dysfunctional state, such as a temporary or permanent coma.
Remember, a power of attorney for health care is always durable. However, in order to make other POA durable, specific language needs to be included which is typically a part of the state law authorizing the document.
When Does A Durable Power Of Attorney Take Effect?
In most states, a durable POA document becomes effective as soon as it is signed, or in case the principal has become mentally incapacitated. In order to take effect, the document must include language like – ‘This power of attorney shall not become ineffective upon the incapacity or disability of the principal”. Without a sentence like this, your POA will not be considered durable.
What Is The Cost Of A Durable Power of Attorney?
A self-drafted durable power of attorney is deemed valid as long as the document follows the laws of the state. You can also hire a law firm or attorney for the job, as they will provide better guidance on the documentation process. The legal fees vary greatly depending on different factors.
If you are dealing with a legal issue and need expert help, call Brian Walker Law Firm PC at 360-695-8886. We will address all your concerns in the best way possible!