Durable Power of Attorney Help Guide

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.

Recording Language

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.

Important Notice, Important Information, or Caution to the Principal

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.

Appointing an Agent

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:

• Can this person be trusted with the principal's financial and legal affairs?
• Is this person financially and legally responsible with their own affairs?
• Will this person take their responsibility as the agent seriously and act in the principal's best interest?
• Does this person understand, or have the ability to learn and understand, the principal's financial and legal affairs?
• Does this person work well, or have the ability to work well, with attorneys, accountants, business associates, and other specialists and professionals if necessary?
• Will this person agree to be the agent given the duties and responsibilities?

Effectiveness

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.

Agent as Fiduciary

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.

Successor Agent and Second Successor Agent

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.

General Authority to Act

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 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.

• "Real property" grants the agent the authority to buy, sell, and manage the principal's real estate. Real estate may be land, houses, condos, co-ops, or partial interests in any of these properties.
• "Tangible personal property" grants the agent the authority to buy, sell, and manage the principal's physically movable properties that are not real estate. This may include properties such as jewelry, vehicles, furniture, art, and heirlooms.
• "Stocks and bonds" grants the agent the authority to buy, sell, and manage stocks and bonds on the principal's behalf.
• "Commodities and options" grants the agent the authority to buy, sell, and manage commodities and options on the principal's behalf.
• "Banks and financial institutions" grants the agent the authority to deal with financial institutions on the principal's behalf. This may include opening and closing bank accounts; depositing and withdrawing funds; receiving and monitoring account statements; taking out loans to support other financial, business, or legal interests; and managing debit and credit cards.
• "Operation of entity or business" grants the agent the authority to buy, sell, manage, or terminate the principal's interest in businesses they own. This may include making employee hire or termination decisions, entering into or terminating contracts, participating in related litigation, investing capital, preparing business statements and forms, and preparing taxes.
• "Insurance and annuities" grants the agent the authority to manage any insurance plans or annuities that were either created by the principal, irrespective of who it benefits, or created by a third party for the principal's benefit. This may include contributing to, modifying, or terminating a contract of insurance or annuity.
• "Estates, trusts, and other beneficial interests" grants the agent the authority to exercise the principal's rights under any estates, trusts, or beneficial interests. A “beneficial interest” is the right to profit, distribution, property, title, or other benefits on assets held within an estate, trust, or contract (i.e. funds from trusts, wills, guardianships, escrow accounts, etc.).
• "Claims and litigation" grants the agent the authority to act on the principal's behalf for any claims or litigation. This may include settling claims, submitting claims to arbitration, and paying or receiving a judgment.
• "Personal and family maintenance" grants the agent the authority to perform acts to maintain the principal and the principal's family’s living standard. This may include paying for the principal and the principal's family’s support, health care, and education, and ensuring a place to live.
• "Benefits from governmental programs and civil or military service" grants the agent the authority to exercise and manage any benefits the principal may be entitled to through governmental programs or military service. This could include managing the principal's Veterans Affairs home loan, government-sponsored tax-deferred savings and investment accounts (also known as Thrift Savings Plan), and pension plans.
• "Retirement plans" grants the agent the authority to establish, contribute to, and modify the principal's participation in and rights under any retirement plans, accounts, or portfolios.
• "Taxes" grants the agent the authority to prepare, pay, and exercise the principal's rights concerning federal, state, and local taxes. This may include preparing annual taxes, receiving any refunds, paying any fines and penalties assessed, and challenging any tax claims or decisions.
• "Gifts" grants the agent the authority to make gifts to third parties as the principal desires (called “beneficiaries”) on the principal's behalf. This may include gifts in accordance with wishes to trusts, minor children or relatives, and tuition savings accounts. 

Specific Acts Authorized

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.

• "Right of survivorship" is a property right if the principal owns a property in joint tenancy. The right of survivorship determines what happens to the principal's part of the joint tenancy when they pass away.
• "Beneficiaries" are generally any person or entity who receives assets, profits, gifts, or any benefit. This may be from a person (third party), an estate, a trust, or an insurance policy.
• "Delegation" authorizes the agent to pass on all or part of their powers and responsibilities to represent the principal to a third party.
• "Waive principal’s rights" allows the agent to relinquish any claim the principal may have regarding a retirement plan or an annuity. The purpose of the principal waiving their rights can vary, but an example would be to pass on the entire benefit to a spouse or child.
• "Exercise fiduciary powers" gives the agent the ability to exercise fiduciary powers the principal may have. This could range from acting as a trustee to voting on a board of directors. Local state law may stipulate what fiduciary powers the agent can or cannot perform.
• "Refuse property interests" allows the agent to relinquish the principal's interest in any property.
• "Inter vivos trust" is a trust created by the principal during their lifetime. Usually the trust's funds, assets, and profits are distributed to the trust beneficiaries when the principal passes away.
• "Pets" may be specifically addressed and cared for within the durable power of attorney. Initial next to this section to give the agent the ability to make reasonable and proper arrangements for the principal's pets in their absence. This may include making boarding arrangements, paying veterinary bills, and maintaining the pets’ standard of living.
• "Funeral and burial arrangements" grants the agent the authority to make funeral, memorial, burial, or cremation arrangements after the principal's death. This may include purchasing a burial plot, identifying a location to inter ashes, and following instructions from the advance healthcare directive and the healthcare agent or proxy, if one exists.
• "After-acquired property" is the principal's property that is not mentioned specifically in their will because it was acquired after the will was made.
• "Gifts to agent" grants the agent the authority to make limited monetary or property gifts from the principal's assets to themselves. The limited gift must not exceed the annual federal gift tax exclusion amount, which can be found with the Internal Revenue Service (IRS). The circumstances where these gifts may be made include if the principal wants to maintain the agent’s standard of living, health needs, or for the agent’s education. It does not grant the agent unfettered authority to use the principal's assets for their own interest. It does allow the agent to give gifts to themselves under limited circumstances and according to the principal's expressed interest.
• "Nominating a conservator" grants the agent the authority to name a conservator for the principal if the principal does not name one themselves and protective proceedings are initiated by the court when the principal becomes incapacitated. The agent may nominate themselves to be the principal's conservator.
• "Other matters, alter ego, incidental powers" grants the agent all the powers and rights to act on the principal's behalf as if they are the principal's alter ego. This includes all matters that are not enumerated within this durable power of attorney as long as those powers are not prohibited in other provisions of this durable power of attorney.
• "Restrictions on property management powers" restricts the agent’s power to use the principal's assets to satisfy their personal obligations alone.
• "Beneficial Use" – Option 1: The principal may initial next to the first beneficial option if the non-biologically-related agent IS ALLOWED to use the principal's property for the agent's own purposes, not for the principal's benefit.
• "Beneficial Use" – Option 2: The principal may initial next to the second beneficial option if the non-biologically-related agent IS NOT ALLOWED to use the principal's property for the agent's own purposes unless the principal specifically includes such authorization in the Special Instructions section.

Special Instructions

Depending on your answer, this section specifies any special additional instructions, terms, provisions, or restrictions the principal will place on the agent’s authority.

Nomination of a Guardian or Conservator

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.

Amplifying Powers

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.

Revocation and Amendment

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.

General Provisions

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. 

Principal’s Signature

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.”

Notice to Person Accepting the Appointment as Attorney-in-Fact

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.

Notary Acknowledgment

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.

Statement of Witness

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).