A durable power of attorney enables you to carry on your financial affairs in the event that you become disabled. Without a properly drafted power of attorney, it may be necessary to apply to a court to have a guardian or conservator appointed to make decisions for you when you are disabled. The guardianship process can be time-consuming, expensive (thousands of dollars) and emotionally draining.
There are generally two types of durable powers of attorney. A "present" durable power of attorney is where the power is immediately transferred to your attorney in fact. A "springing" or future durable power of attorney only becomes active upon your subsequent disability as determined by your doctor. An "attorney in fact" is a person that you appoint to make financial decisions on your behalf in the event of your disability. You can choose anyone to be designated as your "attorney in fact." A popular choice is a person's spouse or domestic partner, a trusted family member, or close friend. The appointment of a power of attorney is important for a number of reasons. Your attorney in fact should carry out your wishes exactly as you have directed. This basically allows you to decide who will make important financial decisions on your behalf. A Durable Power of Attorney is effective immediately upon subsequent disability.