Durable Power of What?

Durable Power of What?

The trust and the living (pour-over) will make up the foundation of an estate plan. No estate plan would be complete without the two separate durable power of attorney, one for financial purposes and one for health care directives. The four listed four documents in the figure below make up a solid, well rounded estate plan for most everyone. This blog will outline the two and attempt to answer the most common questions I get asked about durable powers of attorney.

The Big Four of Estate Plans:

estate planning

What is a durable power of attorney and more specifically, what does it do?  A durable power of attorney sounds a bit scary I believe because of the word power, however, due to the fact that the power is only given under extreme circumstances, it should not be feared, rather it should be a testament to your planning prowess. A Power of attorney is a written authorization for an another person (agent) to “take over” the financial or health care directives of an individual (principal) if that individual becomes Incapacitated, hospitalized or otherwise incapacitated where that person is incapable of making decisions for his or herself. While some powers of attorney are temporary in nature, durable powers of attorney are irrevocable and therefore “durable.” The durable component is why they should be included in an estate plan.


Why would you want a durable power of attorney if you already have a will and a trust? The answer is simple, bad things happen to good people but they don’t always end up in something so finite as passing away. In the case of a principal becoming incapacitated the durable power of attorney for health care will “spring” into place and the agent designated by the durable power of attorney will take over the decision making processes for health care and finances. Also, since there are separate durable powers of attorney for health care and finance, there can be separate agents for dispensing these roles. For example, you might want your brother who is a CPA to handle your finances but your sister who is a doctor to manage your healthcare directives.


If I am married, doesn’t my spouse automatically get to make decisions for me if I am incapacitated? The best answer to that question is yes and no. In many cases if you are in an accident, coma or other incapacitated state, your spouse can make decisions on your behalf, but not all.  That is when a durable power of attorney comes in. By making your spouse the agent in your durable power of attorney, you can avoid issues such as selling jointly held property or make sure that your wishes for health care are followed as you directed. While jointly held accounts will be ok, other assets like jointly held property such as real estate is more difficult to dispose of as a signature from the incapacitated principal is required. This can lead to serious financial strains on top of mental strain during such a hardship. Best to be prepared.


If I am married and both of us become incapacitated, what then? Generally, people assign their spouse as their primary agent but they can also assign a contingent agent to handle their affairs if their spouse is incapacitated or has passed on. When selecting this contingent agent, you should be very careful that they are someone you trust. You are after all putting your life and fortune in their hands. Choose wisely with such a big decision. People often think about family members for such an important, trusted role.


When should I set up durable powers of attorney for my estate? While I am not an estate planning attorney, it is best to develop a comprehensive estate plan all at the same time. Create, the trust, pour-over will and the durable power of attorney at the same time. If you already have some but not all of these components together, make sure that they are reviewed by an attorney to make sure that they are up to date and that they work together in synch.


Estate planning is complicated and should only be undertaken through the legal advice of an attorney and most certainly not this blog. The purpose of this blog is to help guide you on the estate planning process and get you to understand the main components of an estate plan. For example, many attorneys put the durable power of attorney for healthcare in the living will. While that is not how I have outlined it here as a separate document, it still is an important component of a solid estate plan. We encourage you to seek legal advice if you want to develop an estate plan and hope what you have read here will help you make smart decisions with your estate.

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Risley Sams

Risley Sams

Risley Sams, CFP®, MBA, CPWA®, is the Founder and President of RHS Financial. He is responsible for the future of the firm and the strategic services that we deliver.