Below, you will find a detailed description of the main sections of our durable power of attorney in the order that they appear in the document. Note that some of these sections may be omitted from your document depending on how you answer the relevant questions.
The top-left block of text appearing immediately before the document title informs the official handler of the recording process who requested this document to be placed in public record, how the document should be treated after it is recorded, and who created this document.
It is not necessary to record a power of attorney to make it legally binding; however, if the agent has the power to handle real estate transactions and it is likely they will use this power on the principal's behalf, it may be useful to record the durable power of attorney.
This section introduces what the principal may and may not accomplish with this durable power of attorney.
The principal may authorize another person or people, called “agent(s),” to make decisions about and manage their finances, real estate, personal properties, legal affairs, and business affairs. The principal may not authorize the agent(s) to make healthcare decisions on their behalf with this durable power of attorney (a separate healthcare power of attorney will be required).
Giving another person the ability to act on behalf of someone is an important decision. This section is a reminder that the principal should be comfortable with the appointed agent(s) and understand the terms in the document before signing it.
This section is where the principal appoints an agent, also known as an “attorney-in-fact.” The agent is clearly identified by his or her name, address, and phone number to avoid any confusion over identity.
In considering who to appoint as the agent, address the following questions:
This section establishes how long the agent will represent the principal and their interests.
The principal may authorize the agent to start acting on their behalf immediately, when the durable power of attorney is fully executed, or at a later date, if and when they become incapacitated. “Incapacitated” means the principal is no longer able to understand and evaluate information in order to make competent decisions regarding financial, business, or legal affairs. This can be due to physical and mental impairment.
Once the agent’s authority to represent the principal begins, they may represent them until a predetermined specified date or continue without an end date, even through any period of incapacitation, until the principal decides to revoke or change the agent’s authority.
If you choose a specific date, you can enter the exact date of when you want the agent’s authority to expire. For example, this may be two years from the time you sign your durable power of attorney or when you anticipate to return from service or deployment overseas. Specifying a predetermined end date for the agent’s representation may be suitable if the principal anticipates that their life circumstances or the agent’s life circumstances may change drastically in the future. It provides the principal with an expected timeline to reevaluate and update their financial affairs if necessary.
If you choose not to set an end date, the agent’s authority will not end until the principal decides to change it. This may be suitable if the principal wants the agent to easily manage their affairs indefinitely, even through mental or physical incapacitation.
The principal must understand that this durable power of attorney places them and the agent in a fiduciary relationship. The meaning of “fiduciary” is an agent’s obligation to act only in the principal’s best interest. This section once again reiterates that the relationship between the principal and the agent is one of the highest trust and confidence. If and when the agent makes a decision for the principal, it must be for the principal's benefit.
It is important to have multiple potential agents as backup to represent the principal's financial and legal interests in case the primary agent is unable or unwilling to act on the principal's behalf when needed. This may occur for various reasons. A potential agent could be unable to represent the principal because they themselves become incapacitated due to health reasons; or, perhaps a potential agent may be unwilling to represent the principal because they feel uncomfortable with their inexperience to deal with the principal's sophisticated financial or legal situation.
Whatever the circumstances may be, the sections titled “Successor Agent” and “Second Successor Agent” allow you to establish a contingency plan for alternative agents who may also represent the principal if potential agents are unable or unwilling to do so. If you choose to add these successor agents to the durable power of attorney, these successor agents will be clearly identified within the appropriately titled sections by his or her name, address, and phone number to avoid any confusion over identity.
If the principal grants the agent total authority to act on their behalf, then all the authorities below will be displayed within this section. On the other hand, if the principal does not grant the agent total authority, then you will need to select “Yes” or “No” to indicate which authorities the agent is authorized to act for the principal. When the document is completed, the principal must initial each of the authorities they have granted to the agent.
This section lists more specialized and less common authorities that may or may not be applicable to the principal depending on their financial, business, and legal affairs. The principal should read through each authority carefully and must initial each authority they wish to grant the agent.
The following are some terms that may be helpful to know in reading this section. These terms are not exhaustive and you should research the terms more if you have any lingering questions.
Depending on your answer, this section specifies any special additional instructions, terms, provisions, or restrictions the principal will place on the agent’s authority.
Depending on your answer, this section identifies who the principal would prefer the courts to appoint as their guardian or conservator for health care and other purposes if protective proceedings are initiated when they become incapacitated. If the principal has executed a separate healthcare power of attorney, living will, advance directive, or other similar healthcare document that appoints a healthcare agent or proxy, this section may not apply.
The agent may be entitled to certain rights and powers due to the amount of time, work, and responsibility necessary to perform their duties as the agent. For example, the agent may be compensated weekly depending on the difficulty and extensiveness of their services as the agent. The agent will be reimbursed for reasonable and documented costs and expenses.
The agent will need to make representations on the principal's behalf as part of their duties. The principal agrees here that third parties, such as banks or business associates, can rely on these representations.
The agent may not be held liable for any wrongdoing so long as they perform their duties according to the principal's wishes and authorizations within the durable power of attorney in good faith. Unforeseen complexities in making financial, business, or legal decisions may scare a good agent away from serving. This language ensures them that they will not be exposed to personal liability when representing the principal's interests for the principal's benefit.
In executing this durable power of attorney, the principal revokes any previous durable power of attorney documents they have made. The new durable power of attorney becomes the current and effective durable power of attorney for the principal, unless and until it is revoked or another durable power of attorney is executed that includes a revocation clause.
If you wish to amend, change, or update only a portion of the durable power of attorney, this amendment must be attached to the original durable power of attorney that you are making the changes from. Additionally, if the original durable power of attorney is recorded, the amendment must be recorded as well to be effective and recognized as part of the originally recorded documents.
The agent must sign for the principal in the following manner: [Principal] by [Agent], his or her Agent. For example, if the principal is “John Smith” and the agent is “Jane Smith,” Jane will sign for John as his agent as “John Smith by Jane Smith, as his or her Agent.”
This durable power of attorney will remain effective if any section becomes invalid for any reason such as changes in law. The invalid section will simply be disregarded as if it does not exist.
Any person can rely on this executed durable power of attorney, in original or copied form, unless they know for a fact that this durable power of attorney has been superseded, changed, or is otherwise invalid.
When the principal has carefully read all of the terms of the durable power of attorney, they must sign in the presence of an appropriate disinterested witness or witnesses according to their state requirement as provided in the “Instructions for Your Durable Power of Attorney.”
This notice ensures that the agent understands their duties and responsibilities under this durable power of attorney. Most importantly, the agent must act in the principal's benefit and cannot commingle the principal's assets and properties with their personal assets and properties.
The agent must carefully read this notice and all terms of the durable power of attorney before signing and accepting the assignment to become the agent. The agent should seek legal advice if they have any questions.
For certain states, a notary section is attached. Although not required, it is recommended that a notary witnesses the signing, which will help prove the authenticity of the durable power of attorney should it ever be challenged in court.
The principal and the witness or witnesses all must sign in the presence of each other (everyone should see each other sign). The acknowledgment affirms the principal's identity, that they signed the durable power of attorney in the witness’ presence, that they are of sound mind and memory, that the signature was not procured fraudulently, and that the witness or witnesses are not the agents (i.e. are disinterested parties without any conflict of interests).
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