Why is durable power of attorney important

What if an accident or illness -- or simply the effects of aging -- left you unable to tell your doctors what kind of medical treatment you want, or made it impossible to manage your financial affairs? No one likes to consider such grim possibilities, but the truth is that almost every family will eventually face this kind of difficulty. While medical and financial powers of attorney can't prevent accidents or keep you young, they can certainly make life easier for you and your family if times get tough.

A power of attorney is a legal document that gives someone you choose the power to act in your place. In case you ever become mentally incapacitated, you'll need what are known as "durable" powers of attorney for medical care and finances. A durable power of attorney simply means that the document stays in effect if you become incapacitated and unable to handle matters on your own. Ordinary, or "nondurable," powers of attorney automatically end if the person who makes them loses mental capacity.

With a valid power of attorney, the trusted person you name will be legally permitted to take care of important matters for you -- for example, paying your bills, managing your investments, or directing your medical care -- if you are unable to do so yourself. Taking the time to make these documents is well worth the small effort it will take.

If you haven't made durable powers of attorney and something happens to you, your loved ones may have to go to court to get the authority to handle your affairs. To cover all of the issues that matter to you, you'll probably need two separate documents: one that addresses health care issues and another to take care of your finances.

Fortunately, powers of attorney usually aren't difficult to prepare. A medical power of attorney is one type of health care directive -- that is, a document that set out your wishes for health care if you are ever too ill or injured to speak for yourself.

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So what does all this mean? You should consult with an estate planning attorney so you can properly draft and execute a General Durable Power of Attorney, along with establishing a comprehensive estate plan, so your assets, and your loved ones, are protected. Importance of Having a Durable Power of Attorney. By PAustin. An executor is named in a person's will and can only be appointed after a court proceeding called "probate.

A Power of Attorney empowers an Attorney-in-Fact to do certain specified things for the Principal during the Principal's lifetime. A Living Trust also allows a person, called a "trustee," to do certain things for the maker of the trust during that person's lifetime but these powers also extend beyond death. A Living Trust is like a Power of Attorney in that it allows a person to manage another's assets. Like an Attorney-in-Fact, the Trustee can do banking transactions, investments, and many other tasks related to the management of the person's assets.

Unlike a Power of Attorney, however, the Trustee has control only over those assets that are titled in the name of the Living Trust. For example, if a bank account is titled in the name of the person alone, the Trustee has no power over that asset. In order to give the Trustee control over an asset, the maker of the Trust must arrange for the account or property to be owned by the Trust. Also unlike an Attorney-in-Fact, upon death the Trustee can then distribute the person's assets in accordance with the person's written instructions.

There are some transactions that a Power of Attorney is better suited for than a Trust and vise versa. If the Principal of your Power of Attorney also has a Trust and if your powers overlap, your attorney may have to prepare a document notifying the Trustee of the Power of Attorney.

For example, you, as Attorney-in-Fact, may be authorized to sell the Principal's home but the Principal's home is owned by the Trust. The document that your lawyer can prepare is called a "release" because it allows the Trustee to release you the power, as in this example, to sell the home. Whether a release needs to be delivered to the Trustee is a question for your lawyer to decide.

If your Principal had a Trust, you should raise the issue with your attorney. Estate planning involves making sure that a person's possessions and property will pass to whom they want after their death and may also involve saving money on taxes. As Attorney-in-Fact, you cannot make a will for the Principal nor can you make a codicil to change an existing will.

Likewise, you cannot revoke a Principal's wills or codicils. If the Power of Attorney specifically says so, however, you, as Attorney-in-Fact, can transfer assets to a Trust that the Principal had already created and may even be able to execute a new trust for the Principal.

As discussed earlier, a Trust only has powers over those assets that are titled in the name of the Trust. If the Power of Attorney specifically says so, you may change the names on accounts or property to add things to the Trust. If the Power of Attorney specifically says you can, you may also do certain transactions that will, ultimately, benefit persons after the Principal's death. For example, if specifically mentioned in the Power of Attorney, you could do a document called a "Life Estate Deed" that allows the Principal to own a piece of real estate for the rest of his or her life but that, immediately upon the Principal's death, will pass title to the person or persons named in the deed.

A Durable Power of Attorney for Health Care is a document whereby a person designates another to be able to make health care decisions if he or she is unable to make those decisions for him- or herself.

A Power of Attorney can be drafted to give these same powers so there is not much difference. However, a Durable Power of Attorney for Health Care is totally dedicated to health care whereas the Power of Attorney can be much more comprehensive.

Because the statutes creating the Durable Power of Attorney for Health Care are usually more detailed about health care than the Power of Attorney statutes, it is best that the Durable Power of Attorney for Health Care be used. If you foresee making health care decisions for the Principal of your Power of Attorney, you should consult your attorney.

A Living Will reflects a person's own wishes as to the termination of medical procedures when they are diagnosed as terminally ill or in an irreversible coma.

A living will and a health care power of attorney are termed "advance health care directives" because we make them in advance of incapacity. If a person becomes unable to understand or unable to communicate with his or her doctors, the person's Living Will is a legally enforceable method making sure his or her wishes are still honored.

Whether or not a person has a Living Will, the person's Attorney-in-Fact may make health care decisions if the Power of Attorney specifically gives this right and some very exact requirements relating to the manner of execution of the Power of Attorney are followed. For this and other reasons, the Principal should execute a separate advance directive called a "Durable Power of Attorney for Health Care.

Conservators called "Guardians" in some states are appointed by the courts for people who are no longer able to act in their own best interests. A person who has a conservator appointed by the courts may not be able to lawfully execute a Power of Attorney.

If you find out that a conservator had been appointed prior to the date the Principal signed the Power of Attorney, you should inform your lawyer.

The law requires that whoever starts the conservatorship proceeding give the Attorney-in-Fact notice. If a conservator is appointed after the Power of Attorney was given to you, the court will probably allow those powers to continue unless good cause is shown why you should not continue as Attorney-in-Fact or the court determines that the Principal was not competent to sign the Power of Attorney.

If you find out about a conservatorship proceeding being brought against your Principal, you should consult with your attorney. Court proceedings were filed to appoint a conservator for the Principal or to determine whether the Principal is competent.

How does this affect the Power of Attorney? If a conservatorship court proceeding is begun after the Power of Attorney was signed by the Principal, the Power of Attorney may be suspended until the courts decide whether the Power of Attorney should remain in force.

It is up to the court to decide whether you can continue to exercise your powers under the Power of Attorney. The courts encourage people to execute Powers of Attorney to avoid conservatorship proceedings, so it is likely that you will be able to continue to exercise those powers unless the court believes that it would be in the best interests of the Principal that someone else be appointed.

The court may appoint a conservator and permit you to remain as Attorney-in-Fact. If you have the right to make health care decisions for the Principal, the court may not appoint someone to make those decisions in place of you unless you have abused those powers or the Principal was not competent when he or she executed the Durable Power of Attorney for Health Care. The Principal is not deceased, has not been adjudicated incapacitated or disabled; and has not revoked, partially or completely terminated, or suspended the Durable Power of Attorney; and.

A petition to determine the incapacity of or to appoint a conservator for the Principal is not pending. Affiant agrees not to exercise any powers granted by the Durable Power of Attorney if Affiant attains knowledge that it has been revoked, partially or completely terminated, suspended, or is no longer valid because of the death or the adjudication of incapacity of the Principal.

Pursuant to the provisions of TENN.