Why Do You Need a Durable Power of Attorney?
Some of the most important documents in a sound estate plan do not relate to what happens to your property after death. Those documents — called durable powers of attorney — protect you and your assets during your lifetime. If you become unable to make your own decisions for any reason, your durable powers of attorney designate someone you choose to act on your behalf, managing your finances and health care.
What Is a Durable Power of Attorney?
When you create and sign a power of attorney, you designate another person to act on your behalf for the specified purposes. That person is your agent and has authority to act on your behalf. Powers of attorney are legal documents, sometimes referred to as POAs. In Arizona, they must meet statutory requirements to be valid.
A durable power of attorney is a specific type of power of attorney. When a power of attorney is durable, it enables your agent to act on your behalf (or continue to act on your behalf) in the event you become disabled or incapacitated and cannot make your own decisions. If a power of attorney is not written as a durable document, the agent's authority ends if you become incapacitated.
Depending on the provisions of your durable power of attorney, your agent’s power may be effective immediately, or it may arise only in the event of your disability or incapacity. The important characteristic of a durable power of attorney is that it legally vests authority in your agent in the event you cannot make your own decisions.
Types of Durable Powers of Attorney
In Arizona, a complete estate plan typically includes several different types of durable powers of attorney. Specific state laws govern all of them. The types of durable powers of attorney include:
- Durable financial power of attorney
- Durable health care (or medical) power of attorney
- Durable mental health care power of attorney
- Living will for end-of-life decisions
You may hear the term advance directives or health care directives used to describe some documents, with the exception of the durable financial power of attorney. The documents express your wishes in advance and designate another person to act on your behalf in implementing your choices.
Durable Financial Power of Attorney
It may be uncomfortable to anticipate a time when you cannot manage your own financial affairs. However, unexpected events — like an accident, aging, or illness — can create a situation where it is in your best interest to have someone else tend to your finances.
A durable financial power of attorney designates another individual or entity (like a bank or other financial institution) to manage your assets and pay your bills in the event you become disabled or incapacitated. Your agent should be someone you know and trust who has financial knowledge and skill. For this reason, your agent in a durable financial power of attorney often is someone other than the person you designate in your durable powers of attorney relating to health care and medical treatment.
If you do not have a durable financial power of attorney, your loved ones may need to ask the Arizona probate court to appoint a conservator for you. If a court appoints a conservator, it could be someone that you would not choose to manage your assets and finances.
Including a durable financial power of attorney in your estate plan avoids the time and cost of going to court. It also lets you choose the person or entity who will assume the responsibility.
Three types of advance directives — health care, mental health care, and end-of-life care — address decisions about your personal medical care and treatment in the event you cannot make those decisions yourself. These different types of durable powers of attorney are necessary under the provisions of Arizona state laws.
You may designate the same person to make all your personal care decisions, or you may designate separate individuals for different purposes. To ensure that you cover all potential situations, your estate plan should address all contingencies covered by these advance directives.
Without these documents, your loved ones may need to ask a probate court to designate the person to make important decisions about your care. There always is a risk that the court could appoint someone you would not choose to make the decisions for you.
Just as it is difficult to anticipate being unable to manage your finances, it also may be hard to imagine that you might not be able to make decisions about your care. Planning for the unexpected is an essential part of the estate planning process. When you turn to us at Peterson Law Offices, we guide you through the whole process and make sure your unique estate plan addresses all your goals and wishes.
Schedule a Free Consultation to Talk with an Experienced East Valley Estate Planning Attorney
Estate planning, including durable powers of attorney, is a focus of our practice at Peterson Law Offices. We take pride in providing high-quality services at affordable prices. We welcome inquiries from clients throughout the East Valley, including Queen Creek, San Tan Valley, Gilbert, Mesa, and Chandler.
Schedule your free initial consultation by calling 480-878-5998 or using our online contact form.