A durable power of attorney maintains control of the property, legal and financial matters that are spelled out in the agreement even after the principal or the creator of that document becomes mentally incapacitated. A durable power of attorney enables someone to pay medical bills on behalf of the principal but decisions related to the health of the creator of the document cannot be made by the durable agent.
A durable power of attorney for finances is a separate document. This enables the chosen agent to manage the financial and business affairs of the principal, such as mailing or depositing Social Security checks, filing tax returns, signing checks, or managing investment accounts. Institutions that are doing business with the creator of the power of attorney document will ask to see the signed document before enabling the agent to take these actions.
With so much power in the form of financial decisionmaking, who you put into this role has big implications and should be considered carefully.
The durable power of attorney for finances should be created by an estate planning attorney and should spell out the responsibilities of the agent so that the agent is equipped with the necessary information to make informed decisions on behalf of the creator of the document.