Durable Power of Attorney for Property: A Key Component to a Life Care Plan

March 17, 2014

One of last month’s posts suggested adding the creation of Durable Power of Attorney (DPOA) for Health Care to the top of your Valentine’s Day gift list, as a “gift of love.” As its name implies a DPOA for Health Care, however, is limited to decisions regarding an individual’s health care. More likely than not, should an individual become incapacitated, the individual will also need assistance with his/her property (financial) matters.  Contrary to a common misconception, the person you have designated as your executor in your Will has NO authority to act on your behalf with regard to financial matters during your lifetime.  As such, for most people, creating a DPOA for Property (financial matters), while you are competent, is highly recommended.

Like a DPOA for Health Care, a DPOA for Property is a legal document which allows you to make advance decisions in the event that you later become incapacitated. Specifically, within a DPOA for Property you decide in advance who you would like to make decisions regarding your finances, should you ever become incapacitated and unable to handle your financial matters and decisions.  The person you appoint is called your agent, and the form allows you to designate back-up agents, in the event your first-named agent is unable to act on your behalf.  When creating a DPOA for Property, you will also determine when the document takes effect.  There are pros and cons that one should carefully consider before deciding when his/her DPOA for Property should take effect.  While the law regarding statutory DPOAs for Property varies from state to state, the statutory form in most states specifically sets forth the powers that your agent will have regarding your financial matters.   In Illinois, an individual can also authorize his/her agent to exercise additional powers by specifically adding said powers to the third paragraph of the statutory form.  Also, varying from state to state are the requirements for creating a valid DPOA.  A common requirement among states, though, for creating a DPOA for Property is that you must be competent.  When a POA is made “durable,” the document will remain in effect upon your (the principal’s) incompetency.  An individual who is no longer competent will not be able to create a valid DPOA for Property.  In those circumstances, the individual’s loved ones will have to pursue other options to assist the individual with necessary financial matters and decisions, such as guardianship.

Of course, each of us hopes that we remain competent until our last breath and that we never, ever need a DPOA for Property, or for Health Care.  Our life experiences, however, tell us that many of us will, at one time or another, need assistance with both our financial decisions and health care.  As such, making an advance “life care” plan is not only a gift we can give our loved ones, it is first, and maybe foremost, a gift that we can give ourselves.

So, for those of you who have not, yet, created a DPOA for Property and/or Health Care, we at the Elder Law Center, P.C. encourage you to add it to the top of your to do list and contact your attorney to discuss your wishes and to help you create valid DPOAs that will be effective, should they ever be needed.   A “life care” plan that includes DPOAs is the gift of “peace of mind” that you give to yourself.

©Copyright 2014 by Constance Burnett Renzi. All rights reserved.

To discuss durable powers of attorney (life care planning), estate planning, and/or elder law issues with an attorney, please call the Elder Law Center at 630-844-0065 or contact us via email. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.

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