A durable financial power of attorney is a writing that grants authority by a person to another person to handle his or her financial affairs. The financial subjects contained within the writing typically include: real property; tangible personal property; stocks and bonds; commodities and options; banks and other financial institutions; operation of entity or business; insurance and annuities; estates, trusts, and other beneficial interests; claims and litigation; personal and family maintenance; benefits from governmental programs or civil or military service; retirement plans; and taxes. With a durable type form, the agent's authority would not be cancelled if it was later determined that the principal had become incompetent due to an illness or injury as it would be with a nondurable power of attorney.
The principal can also list a successor agent who could replace the agent in a situation where the agent is unable or unwilling to carry out his or her duties, or resigns. If the agent is the spouse of the principal and one of them began divorce proceedings, the spouse's powers as agent would automatically be revoked by law and the successor agent could immediately step in and begin to handle the affairs of the principal.
A durable financial power of attorney is effective at the time it is signed by the principal, but there is also a "springing" durable type form. In the springing type form, the agent is authorized to begin handling the affairs of the principal upon a future event, contingency or date specified in the form. The principal may choose anyone that is an adult to determine that the event or contingency had occurred. If the event is incapacity and the principal has not chosen anyone to determine that this event had occurred, the determination can be made by a licensed physician or psychologist. The springing type form is not permitted in all states, so it is necessary to check your state laws prior to using one.
There are certain important tips that are quite useful in handling the issues related to using a durable financial power of attorney. You should choose an agent whom you can trust. It can be any adult member of your family or an adult friend. You can also verbally communicate to your agent or list instructions in your form to provide your agent with guidance and to make him or her aware of your financial assets and obligations and what acts you want him or her to perform on your behalf.
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