DURABLE
POWER OF ATTORNEY
Everyone
should take steps to plan for
his or her disability. The
"durable power of attorney" is a
tool everyone may at sometime
need. Disability strikes
suddenly and unpredictably. It
can occur slowly (as in various
disabling diseases) or suddenly
(as in strokes or automobile
accidents).
In the event
of disability, unless a person
has a power of attorney, the
option to deal with that
disability is to begin Court
proceedings to establish a
guardianship of the person and a
conservatorship of the person's
property. These proceedings are
expensive and time-consuming
because they require Court
supervision, annual reports,
petitions for authority to act
in certain cases, and surety
bonds.
Most states,
including Iowa, authorize the
use of durable powers of
attorney. The word "durable" is
used because the power of
attorney survives or "endures" a
person's disability or
incompetency and allows the
person appointed (the
attorney-in-fact) to continue to
act as long as the person making
the power of attorney is alive.
In some cases
the power of attorney is drafted
to become effective only if and
when a person no longer is able
to manage his or her own
affairs. Thus, the person is
left in complete control of his
or her affairs until a
disability. If disability never
occurs, the durable power of
attorney never becomes
effective.
In other
cases the power of attorney is
prepared so that it becomes
effective the moment it is
signed. This is done when a
person needs someone else to act
on their behalf when they are
away, or the person wants
someone else to immediately help
them with their financial
affairs. It also is appropriate
when the person's physical
health is rapidly deteriorating
or extensive medical treatment
is imminent.
A durable
power of attorney provides many
advantages to a client. It is
much less expensive and much
more flexible than a
guardianship or conservatorship.
It gives the attorney-in-fact
complete authority to act on
behalf of the person without the
intervention of any Court. It is
private and requires nothing to
be filed in the public records.
It allows a person to decide who
should act on their behalf
instead of having a judge decide
who will handle that person's
financial affairs.
Usually a
spouse is named as the
attorney-in-fact, with one or
more children named as an
alternative in the event the
first-named person cannot act.
The durable
power of attorney grants the
attorney-in-fact broad powers
and authority to pay bills,
deposit checks, invest in and
renew certificates of deposit,
manage other investments,
continue a business, sign tax
returns, and so on. These powers
provide greater flexibility and
make it more convenient to
operate than the Court-appointed
alternatives.
A power of
attorney can be terminated by
giving written notice of such
termination to the person named
as the attorney-in-fact.
--
January 2, 2002.
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