Collin County Living Well Magazine Summer 2014 | Page 29

What is a Durable
Power of Attorney
And Who
Needs One?
By Lori A. Leu & Erin W. Peirce

M

any people understand they need a Will
to control the distribution of their assets after they die. However, the most
important estate planning document is
actually a Durable Power of Attorney.
Imagine that your father is diagnosed with an aggressive
form of Alzheimer’s disease and suddenly needs to move to
a memory unit in an assisted living facility for his safety.
Previously, your father had been very independent and
never involved you in his finances. However, you recently
noticed overdue bill notices on his counter and stacks of unopened “home shopping” packages. Upon further investigation, you discover your father has a large amount of debt
and very little savings. His income is not sufficient to pay
the cost of assisted living, he has no long-term care insurance, he is not eligible for Veteran’s benefits, and the care
he needs is not covered by Medicaid. The only way to pay
for his care is to sell his only asset, his home. The market is
favorable, so you have few concerns, until you speak with a
title company and learn that your father must have named
you as his agent in a Durable Power of Attorney for you to
have authority to sell his home. Unfortunately, your father
never understood the need for a Durable Power of Attorney,
and now it is too late. Your father is legally incapacitated
and no longer able to sign legal documents. Without a Durable Power of Attorney, no one is legally authorized to act
on behalf of your father – not even his family. The only way
you will be able to sell your father’s home, pay his bills,
or otherwise manage his finances, is to be appointed the
legal guardian of his estate by a judge through a lengthy
and costly court process. If only your father had signed a
Durable Power of Attorney when he had the ability to do so,
he would have saved thousands of dollars in legal fees, and
months of heartache and stress.
A Durable or “Financial” Power of Attorney is a legal
document by which you designate someone to serve as
your agent with the legal authority to act on your behalf in
financial affairs, including managing accounts, paying bills,
and selling real property, among others things. A Durable
Power of Attorney can be effective immediately or it can

be “springing,” that is, effective only upon a physician’s
written confirmation of disability or incapacity. Alternate
agents should be named in case any agent is unable or unwilling to serve, so that you always have someone trustworthy in place to act on your behalf. Everyone, at some time,
will need an agent to act on his or her behalf. Your wishes
should be placed in writing while you have the ability to do
so.
When an agent accepts the authority granted under a Durable Power of Attorney, a “fiduciary” relationship is established between you, as the principal, and your agent. This is
a special legal relationship that imposes legal duties on the
agent until he or she resigns or ceases to act, or until you revoke the authority or die. Your agent’s fiduciary obligations
generally include the duty to (1) act in good faith on your
behalf, (2) do nothing beyond the authority granted in the
power of attorney, (3) act loyally for your benefit, and (4)
avoid conflicts that would impair the agent’s ability to act in
your best interest. Your agent is prohibited from asserting
ownership or benefiting personally from your assets.
A Durable Power of Attorney is recommended for everyone 18 years of age and older. Because a Durable Power
of Attorney conveys broad and strong powers, before appointing a financial agent you should consider who would
be worthy of such authority. Often people prefer to appoint
spouses, children, or other family members as agents, to
keep financial affairs private and avoid hurting feelings.
However, appointing a family member may not be the best
option for everyone. In all cases, signing a Durable Power
of Attorney and appointing an agent should be done only
after deep reflection as to the abilities and trustworthiness
of each candidate. For a better understanding of the importance of estate planning documents and elder law issues,
and to find an elder law attorney in your area, go to www.
naela.org.
Lori A. Leu and Erin W. Peirce are Elder Law attorneys
with Lori A. Leu & Associates in Plano, Texas. They help
clients sort through Elder Law issues every day and can be
reached at 972-996-2540.
Collin County Living Well Magazine • Summer 2014

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