A durable power of attorney (POA) is an important part of an estate plan. It is a legal document that grants an agent the legal authority to make important decisions on behalf of another person, who is called the principal.
It is important for the principal to choose a trustworthy agent who will act in their best interest. The agent has important responsibilities, such as managing the principal’s bank accounts, paying bills, buying or selling property, or filing taxes, for example.
The agent must act in accordance with the principal’s wishes, act in good faith and avoid any conflicts of interest.
Durable means that the POA remains effective even if the principal becomes incapacitated and unable to make decisions, unlike a general power of attorney.
Requirements for a valid document
The principal must meet certain requirements to create a valid document. They must have capacity and competency when they execute the document. This means they must fully understand what it means to appoint an agent to act on their behalf.
The POA must also be in writing and signed by two adult witnesses, who are not the named or alternate agent listed in the POA. The principal can give the agent broad or limited powers, depending on their needs and preferences.
Although it is not required to have the POA notarized, a notary seal or stamp can support the document’s authenticity and enforceability.
The principal can also revoke the POA at any time, as long as they have the capacity to do so. If the POA is in place and the principal becomes incapacitated, the POA will remain in place until the principal’s death.