Life is unpredictable. Whether it’s an unexpected illness, an accident, or other unforeseen event, being prepared for such circumstances can significantly reduce stress and provide peace of mind for you and your loved ones. One way to prepare for the unexpected is by establishing a Durable Power of Attorney (DPOA).
What is a Durable Power of Attorney for Finances?
A Durable Power of Attorney is a document that lets you name someone you trust to make decisions for you if you can’t. Whether you’re dealing with a sudden illness, an accident, or other unexpected event, this person will step in to handle things like your finances and legal matters.
Why is it important to set up a Durable Power of Attorney?
- Peace of mind: A DPOA will help to ensure that your financial and legal matters are managed according to your wishes, even if you are unable to communicate or make decisions for yourself.
- Legal authority: In Oregon and many other states, family members (including your spouse) do not automatically have the right to manage your finances. You need to grant them authority through a DPOA.
- Preparation is key: You must set up your DPOA while you are still capable of making your own decisions. If you wait until you’re already incapacitated, it will be too late.
- Special circumstances: A DPOA could be beneficial for students studying abroad or military members stationed overseas. It would ensure that their affairs are managed according to their wishes while they are away.
How do you set up a Durable Power of Attorney?
There are many resources for Durable Power of Attorney forms and templates. You can get them from online services like LegalZoom, purchase them from office supply stores such as OfficeMax, or even find free templates and information on local state and government websites. If you want your DPOA to be more personalized to fit your specific situation, you may want to work with an attorney. An attorney can ensure that all legal requirements for your state are met, as each state has its own specific rules and regulations.
How long does a Durable Power of Attorney last?
Typically, a DPOA does not expire on its own. It will remain in effect until one of the following happens:
- Revocation
- Termination
- Death
- Court order
How does a Durable Power of Attorney work?
We can demonstrate how a DPOA works via an example:
Consider David, a retiree who works with a financial advisor (Lisa) to manage his investments. David consults with an attorney to create a Durable Power of Attorney designating his daughter (Emily) as his agent, specifying that Emily will have the authority to manage his bank accounts, pay bills, and make investment decisions.
David provides copies of his DPOA to Emily, his bank, and his financial advisor. He keeps the original in a safe deposit box and reviews it regularly to make sure it still meets his needs.
Now, if David becomes incapacitated in some way and is unable to communicate his wishes or make financial decisions for himself, Emily can work directly with Lisa and his bank to handle all financial transactions and decisions on David’s behalf.
We recommend that our clients have a DPOA because it’s a crucial step in preparing for unforeseen events. As is mentioned above, without a DPOA your family members do not automatically have the legal authority to handle your finances, which could lead to complications and delays in settling your estate. This document clarifies who to contact and ensures that your financial matters are managed according to your wishes.
We also suggest our clients work with an attorney to set up their DPOA to make sure the document is legally sound and meets all of their specific needs. Once it has been created, copies should be provided to important people, such as the named agent, the attorney, your financial advisor, and a representative at your financial institution(s). The original should be stored in a secure location for personal records. You can get a referral to a lawyer in Oregon through the Oregon State Bar website.
Creating a Durable Power of Attorney for finances is a simple way to protect yourself and your loved ones from the unknowns of life. It gives you control over who manages your affairs and ensures that things will be handled the way you want them to be.
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