Durable Power of Attorney
The second basic estate planning document, the Durable Power of Attorney allows for a large array of authority to act on behalf of another person. The Principal (person granting the authority) give powers to their Agent (person acting on behalf of the principal). The powers can be very wide and include transferring property or real estate, purchasing property, buying or selling stocks or other financial instruments, entering into agreements, continuing or ending businesses, opening or closing bank accounts, accessing safety deposit boxes, entering into or continuing litigation, claiming on insurance policies, dealing with taxes, conducting family affairs, and much more.
In general, the Agent can act on behalf of the Principal on just about any matter that the Principal needs or wants. This is a very effective tool to have in the estate planning toolbox. If the Principal is out of town, unavailable, or worse, if something were to happen to them where they cannot manage their own affairs, the Durable Power of Attorney is very handy. Without a Durable Power of Attorney, anyone needing to act on behalf of the Principal will need to go through a court action to be named as guardians, potentially taking months of time and costing thousands of dollars.
The authority granted in the Durable Power of Attorney can be immediately given, or can be made to only arise when the Principal is incapacitated, added a layer of security if the Principal is unsure about giving so much power to another person. The Agent can be personally liable if they abuse their authority. The power granted by the Durable Power of Attorney is only valid while the Principal is alive and once deceased, the Personal Reprsentative named in the Will has seniority.