Durable Power of Attorney

What is a Durable Power of Attorney?

A Durable Power of Attorney is a legal document that authorizes one person to act on behalf of another person in financial and legal matters. It is called “Durable” because it remains valid after the person granting the power has lost his or her mental capacity; this is when a Power of Attorney is most often needed. The person who is given the power is called an Attorney-In-Fact.

A Durable Power of Attorney is not the same as a Health Care Surrogate. The person making financial decisions for you does not have to be the same person who handles your medical decisions.

Why do I need a Durable Power of Attorney?

A Durable Power of Attorney is often the most important legal document a person can have. It allows another person to handle your banking, other financial and legal affairs. If you do not have a valid Power of Attorney and lose mental capacity or are physically incapacitated for an extended period of time, your family will be forced to obtain a Guardianship over you, a complex and often unpleasant process.

Some Power of Attorney documents become effective only when the person granting the power becomes incompetent. This type of document is called a Springing Power of Attorney. While this sounds good in theory, it is very restricting in practice. To trigger a Springing Power of Attorney, one or more physicians must declare the person mentally disabled. In cases of cognitive decline, typical of a dementia or Alzheimer’s patient, it is difficult to state exactly when a person is disabled. This is especially true because persons with these conditions have good days and bad days. Except in extreme cases, physicians are loathe to declare a person incompetent for fear of liability, and thus are reluctant to sign a statement declaring the person disabled. Absent the doctor’s signature, the Springing Power of Attorney is worthless.

Another type of Power of Attorney is the Immediate Power of Attorney. Rather than springing into action at some point in the future, it goes into effect immediately when you sign it.

When you select your Attorney-In-Fact, you need to select someone you trust completely. It need not be a relative; it need not be your oldest child; the person does not need to live in Kentucky. But it should be a very honest person, someone in whom you have complete trust.

If you change your mind, you can always revoke your Durable Power of Attorney. Only one person should be appointed as your Attorney-In-Fact. Appointing multiple people might cause problems: for instance, some financial institutions require that all of the folks named as Power of Attorney be present to make a decision, even of the document clearly states Jane or John. Therefore, instead of appointing Jane and John, appoint Jane and name John as the alternate if Jane dies or is no longer able or willing to serve.

Many people name an adult child as their Attorney-in-Fact. Due to the advanced ages of many of our clients, these children are not youngsters themselves. Therefore, we strive to name one or more alternate Attorneys-in-Fact. If the Power of Attorney only names a primary Attorney-in-Fact, and that person becomes disabled himself, dead, or unable or unwilling to serve, all that remains is a useless piece of paper.

Unlike most legal documents that sit in a drawer, our Durable Power of Attorney is used regularly because our clients are older. Our Durable Power of Attorney takes into consideration many possible needed usages, such as: Medicaid planning; estate planning; divorce; retaining the right to sue if necessary; and many other powers. Our Durable Power of Attorney typically runs about 8 pages. We usually record each Durable Power of Attorney in the deed room of the county in which the signer has real estate. This is a necessary step in case the Attorney-In-Fact needs to handle real estate. Title insurance companies will not insure property that has been sold by an Attorney-In-Fact where the original Power of Attorney has not been recorded in the deed room. By recording the document immediately we avoid the problem where real estate cannot be transferred because the family has lost the original Power of Attorney.

Our Power of Attorney document also contains many other sections that are often absent in documents prepared by other attorneys. For example, if the Power of Attorney will eventually be used for Medicaid planning or asset preservation, specific language granting such authority must be included.

When should I get a Durable Power of Attorney?

A Durable Power of Attorney is needed by every adult over the age of 18. You never know when that meteorite is coming down to hit you on the head! Since you cannot know when a Durable Power of Attorney will be needed, taking the attitude that “I will sign it when I need it” does not work. You should have one now.

If asset preservation is one of your goals, it is especially important to have a strong and properly drafted Power of Attorney document. If a person has advanced dementia or other diminished brain capacity due to stroke, illness or injury and has not signed a Power of Attorney, Medicaid Planning or asset preservation may not be possible, especially if there is no spouse.

I am married. Do I need a Durable Power of Attorney?

YES! Many people mistakenly believe a spouse can handle their finances if they become incapacitated. Not so: no one, not even a husband or wife, has the authority to deal with your bank accounts, investments, real estate, insurance, etc., unless you have given that person authority. The Power of Attorney is the document that gives them that authority.

Do not be fooled into believing that all of your assets are in joint names with your spouse. What is the first word in the phrase “individual retirement account?” “Individual.” If you have an IRA, only you can make deposits to it or withdrawals from it and change the beneficiary — unless you have a Power of Attorney document authorizing someone else to do those things. Do you have an insurance policy? No one — not even your spouse — can get information about that policy — unless you have a Power of Attorney document authorizing him or her to do so.

If you have questions or would like to schedule a free consultation with us, please contact us. We’re here to help.

If you have questions or would like to schedule a free consultation with us at our Louisville office, please feel free to contact us, we’re here to help.


(502) 581-1111