One of the most powerful tools for managing your affairs should you become mentally incapacitated is a general durable power of attorney (“DPOA”). This legal document allows you to appoint another person to make legal and/or health care decisions on your behalf in the event that you are unable to do so yourself. It is “general” because it covers a wide range of situations, such as selling real estate, purchasing items you may need, accessing your bank accounts and other investments, etc. It is “durable” because it is effective even if you are deemed cognitively incompetent; indeed, that’s probably the only time you’ll really need it!

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Power of Attorney (POA) and Competency

There are two types of POAs: a general durable POA takes effect on signing without having to prove you are incapacitated. The other—called a “springing power”—only becomes effective upon the determination by a physician that you are unable to make your own decisions regarding your property or care.

One of the misconceptions about DPOAs is that you lose your independent right to make decisions for yourself (i) when you sign it, or (ii) when the power “kicks in.” In fact, you continue to have all the rights you had before you signed the DPOA—to sign documents, withdraw money from your bank accounts, and make other legal decisions—unless and until a court order says you lack the capacity to do so.

It is wise to include specifications in your POA documents as to the requirements for determining competency. You may decide to include a clause that identifies exactly who is involved and how the final decision is made to declare that you are mentally incompetent.

Since the person you are naming as your “agent” under your DPOA will have very broad powers over your property and legal decisions, it is vital to choose your agent carefully. Frequently spouses appoint each other, with a named successor agent being one or more of their children.

Fiduciary Responsibility of POA

Another misconception is that the agent can take your money and give it to themselves. However, under state laws, the agent has “fiduciary responsibility,” which means that they must only act in your best interests, and they are barred from benefiting themselves with your money.

Naming two or more agents to serve at the same time can prevent inter-family jealousy and ensure that a rogue agent cannot enrich themselves secretly while you are incapacitated. However, it has the disadvantage of requiring all the agents to agree about every decision to be made, significantly slowing down their ability to access funds and make other legal decisions.


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More frequently, parents name a child with a series of successor agents named right in the document. That way, if the first named child/agent does not want to—or is unable to—serve, there is already a named successor agent. In most cases, it is not a good idea to allow the named agent to name their own successor, since they may select someone that you may not have approved had you had the chance to choose.

POA and Medicaid Planning

One often-overlooked provision is the ability to do “Medicaid planning” should the need arise. Under state laws, an agent cannot give away your property without your consent. But under a properly drafted Medicaid planning paragraph in your DPOA, the agent would be specifically given the authority to make transfers to other family members, if doing so would preserve your assets for the family unit while accelerating your access to Medicaid coverage in a nursing home or assisted living facility.

Finally, be sure to have an attorney prepare this important legal document for you and avoid using a cheap or free “form” from the internet! Not only are you paying for the language in the document, but also for the expertise in eliciting from you which clauses you wish to be included and who should serve as your agent(s).