The majority of estate planning documents are concerned with the distribution of assets after someone passes on. However, it's important to implement contingencies for the possibility that you might become incapacitated and unable to make certain decisions regarding your affairs. Appointing a durable power of attorney will ensure your wishes are fulfilled during this time. Here's a closer look at this designation and what it entails.

What Is the Purpose of a Durable Power of Attorney?

This legal appointment only becomes binding if you are incapacitated by injury or illness. The term "durable" refers to the strength of typical powers of attorney during the period where you cannot make decisions on your own. 

For example, a general power of attorney's responsibilities involving business and personal decisions usually do not apply if the designator is incapacitated, but a durable clause extends this privilege. A special or limited power of attorney, which is restricted to certain transactions like selling real estate, can also be made durable. 

What Are the Advantages?

Appointing a durable power of attorney avoids lengthy court delays in the event of incapacitation. Since the court will not need to go through the process of appointing a guardian or conservator, decisions can be made more quickly. The principal is also not required to transfer property to the person with power of attorney, simplifying the estate planning process and implementation if you ever become incapacitated. 

The provision is inexpensive and ideal for those with assets that don't warrant the creation of a revocable trust, but it also serves as a valuable supplement for a trust. However, it's important to remember that a durable power of attorney does not extend beyond the principal's death, so it generally should not be used in place of a trust. 

What Powers Are Included?

Generally, an agent with this designation can make decisions regarding medical decisions, real estate transactions, business operations, and various account transactions. Certain actions cannot be delegated with this document, such as voting in an election, marriage or divorce decisions, changing a will, and fiduciary powers. 

When choosing an agent and drafting the responsibilities, many people choose to grant them additional abilities, such as paying medical and tuition expenses for family members, making annual exclusion gifts to identified donees, accessing safe deposit boxes, and creating or revoking trusts.

For help navigating the complexities of estate planning, turn to the legal experts at Hawaii Convey in Honolulu. This firm has more than three decades of experience drafting wills, serving as executors of their clients' estates, and providing probate representation. Learn more about their estate planning expertise online and schedule a consultation at (808) 792-8777.