"General" Power of Attorney

A "power of attorney" (POA) is simply a written statement that transfers control of property to another person. It is a powerful legal tool. For example, if you are leaving town and need to sell your car, you could give someone power of attorney over all of your property. This would be a "general" power of attorney.

At first, a power of attorney might seem like it could replace the need for a Will and Revocable Living Trust. However, there are three limitations to them:

They do not continue once the principal dies. The law says that if the principal is dead, the power of attorney is no longer valid.
They usually become void when the principal becomes incompetent.
The agent is not controlled by the strong "fiduciary relationship" which controls a trustee. The agent has full power to do whatever he or she wants to do with your property whether or not it is in your best interest.

The Durable Power of Attorney

The Durable Power of Attorney allows for someone you appoint to manage your daily affairs when you are incapable of doing so. This special type of power of attorney has now been validated by laws in every state. The durable power of attorney endures the incompetency of the principal, and the agent has power to act even though you become incompetent. In addition to managing your property, the agent is also given the power to act on your behalf with the electric company, gas company, your credit card company, and any other companies that you do business with.

Durable Power of Attorney for Health Care

Either as a separate document, or as part of your Durable Power of Attorney, your Durable Power of Attorney for Health Care appoints power to your agent for medical decisions while you are incompetent. Your agent has the legal right to see all of your medical records, hire and fire doctors, move you to a different hospital, and do all of the other things that it would be impossible to do without the legal backing of the durable power of attorney for health care.

In no way does your Durable Power of Attorney replace the need for a Will or a Revocable Living Trust, but has a place in your legal arsenal.

Springing Power

A good Durable Power of Attorney should "spring" into action under certain conditions defined by you. It shouldn't have to wait until you are declared incompetent by the court. The lawyers call this transition of power a "springing power".

In Lee's Accumulation and Preservation of Wealth System, a Durable Power of Attorney with springing power is included, making it only a matter of having two physicians sign a form in order to have the document "spring" into action. This is much quicker and easier than going to court and getting a court order.

Main Purposes of Durable Power of Attorney

Here are the main purposes for a durable power of attorney:

Managing non-trust property

If you have set up a Revocable Living Trust, then one role of the Durable Power of Attorney is to take care of property not in the Trust if (and only if) you become incompetent. If you didn't have a trust, then the durable POA could give your agent the power to deal with all of your property should you become incompetent.

Dealing with "Third Parties"

It also gives the agent power to act on your behalf with such entities as your credit card company, your gas company, your electric company, and other companies that you do business with. Have you ever tried to deal with a utility company on someone else's behalf (even your spouse)? It is almost impossible without a Power of Attorney.

Directing Your Healthcare

Finally, in most states, a durable power of attorney for healthcare can be used to make critical medical treatment decisions for you while you cannot make them for yourself. Although the Living Will can let you die with dignity and tells doctors to unplug the machines, it only directs medical decisions when death is certain. You need an objective person making your medical decisions when you are unable to do so...and they need the legal power so the doctors are obligated to listen to them. Your Durable Power of Attorney for Healthcare gives the agent of your choice that power.

More Information on Durable Power of Attorney and other Estate Planning Tools

FREE DVD on Durable Power Of Attorney
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This DVD is your guide to understanding estate planning, including the durable power of attorney.

Other Tools:
Lee's ebook, Protecting Your Financial Future, gives you all the basic information of estate planning, including important information on the Durable Power of Attorney.

For establishing your own estate plan, the Estate Planning System (Accumulation and Preservation of Wealth) gives you all the knowledge and proper legal documents to properly set up, fund, and maintain your own Revocable Living Trust and other "tools of wealth". An extensive Durable Power of Attorney is also included in the kit.

With the Accumulation and Preservation of Wealth System, you'll save thousands of dollars in attorney's fees and end up with a better estate plan than over 99% of other people in the country.

sp. Revokable Trust

aka Inter Vivos Trust