5 Important Considerations for Preparing a Durable Power of Attorney

Vivienne Duncan directs the Cancer Advocacy and Elderlaw Projects.

(1) The Crucial Difference Between a Durable Power Of Attorney (DPOA) and a Guardianship

Though you may be managing your financial matters without help, over time changes in your physical or mental health may affect your ability to stay on top of those demands. For many, facilitating this assistance will come down to a Durable Power of Attorney (DPOA) or guardianship. Preparing a DPOA is a simpler process than appointing a guardian. With a DPOA, you choose your agent(s) and the scope of their powers. If you change your mind about your agent or choose to revoke (cancel) the DPOA, you can do so by notifying the agent as long as you still have mental capacity. By contrast, a guardian is appointed by a court and New York State rules specify the order of preference to be applied among your relatives – the person appointed as your guardian may not be the person you would have chosen for yourself.  Similarly, the court will decide the scope of your guardian’s powers. Lastly, you cannot ‘end’ a guardianship yourself, it would need to be terminated by a court.

(2) A DPOA is a Crucial Element in Advance Planning

With a DPOA, you (the “principal”) can appoint a person of your choice as your “agent” who can act on your behalf on financial matters such as handling your bills and taxes. A DPOA offers protection. You may include a wide range of powers in the document, or keep it more narrowly focused – the decision is yours. If you want to allow someone to take care of your banking, a DPOA is a safer option than adding them to your bank account as a joint owner. If their finances become part of a legal proceeding (such as a divorce settlement or lawsuit) any funds held in their name may be at risk, including your bank account.

(3) Timing is Essential

Timing is important for signing a DPOA since neither a family member nor an attorney can sign one for you; only you can do that. If you plan to get a DPOA you must do so while you have ‘mental capacity’ – meaning you must be able to understand the nature (or purpose) of a DPOA and the consequences of signing one. Having a DPOA does not affect your right to continue making your own decisions; as long as you are not mentally incapacitated, your agent must follow your instructions when using it. If you later lose the ability to make decisions, your agent can handle your affairs and must act in your best interests while doing so.

 (4) Without a DPOA, You May Need a Guardian

If you become mentally incapacitated without a DPOA in place, a relative may have to go to court and petition to be appointed as your guardian to make decisions on your behalf. Without a DPOA or guardian, many businesses, including banks, are unlikely to provide others with essential information or access to your accounts. Depending on your ability to make decisions, the court may appoint a ‘guardian of the property’ to handle your financial affairs, such as paying bills on time and maintaining your investments, or a ‘guardian of the person’, if you need assistance with handling your personal affairs, such as health care matters; or the guardianship may cover both.

 (5) Prepare a Health Care Proxy in Addition to a DPOA

While a DPOA allows your agent to handle your financial matters, a Health Care Proxy (HCP) enables you to appoint an agent to make health care decisions on your behalf when you are unable to make those decisions. The combination of powers will provide your agent(s) with powers to cover both financial and health-related issues – similar to a guardianship of the person and property – but a simpler and less intrusive option.

To make sure your family has the information and authority they need to handle your affairs if and when necessary, speak with an elder law attorney about preparing the main estate planning documents (a Will, Durable Power of Attorney, Health Care Proxy, Living Will and Disposition of Remains). These essential documents will make all the difference for you and your family.

If you are interested in preparing a DPOA, Health Care Proxy, Last Will and Testament, Living Will or Disposition of Remains directive, and you are a senior or a cancer patient or survivor, the Elderlaw Project (ELP) and Cancer Advocacy Project (CAP) at the City Bar Justice Center can provide free assistance to income-eligible individuals. To inquire about your eligibility, seniors can contact ELP at 212-382-6658 or click here to apply for help; cancer patients and survivors can contact CAP at 212-382-4785 or click here to apply for help.

This communication is for the general education and knowledge of our readers. Because all legal problems involve their own specific set of facts, this informational resource is not and should not be used as a substitute for independent legal advice. This informational resource also is not intended to create, and its receipt does not constitute, an attorney-client relationship. Please contact competent, independent legal counsel for an assessment of your particular legal concerns, or contact our Legal Hotline (212.626.7383 or https://www.citybarjusticecenter.org/legal-hotline/) to determine whether you qualify for assistance from the City Bar Justice Center.