Durable powers of attorney (DPOA) gives a trusted individual the power to manage your legal affairs as you age. A DPOA is among the most important incapacity planning document you can have and we often see them in any numerous shapes of disrepair. When you create your DPOA, please remember the following:
Your DPOA should be updated about every 10 years.
There are a number of reasons for updating your DPOA about every ten years:
- The laws change! There was a huge change to the Florida Statutes on DPOAs in 2011 but the law may change again at some point.
- Banks and other financial institutions do not like DPOAs and they will give you trouble with older documents.
- You get to look at who you name as your agent and alternates to see if they will still act.
- We know that our DPOA form changes every once in a while and the form we use now is better than the one we used 10 years ago.
You should trust the person you name as your attorney-in-fact (your agent).
This should go without saying but we still say it, regardless. The power of attorney is the power to steal, so make sure you trust the person you name as the DPOA is presently active as soon as you sign it!
Have a good elder law attorney create your DPOA
The DPOA is one of your most important estate planning documents and should only be done by an experienced elder law attorney. Do not use an on-line form, your attorney-friend down the street who does not practice elder law or even a friendly estate planning attorney who does not stay up to date on the laws.
DPOA for Aging Couples!
VERY IMPORTANT: For married couples, the DPOA will typically name each other first and then alternate agents. As you age, you may want to add a child as co-power of attorney with the parent. An example:
Mom and Dad, age 90, are finding it more difficult to get around and are showing signs of dementia. Their existing DPOA names only each other, with the responsible child as only the alternate agent. This means that with Mom and Dad going downhill, there is no one who is able to step in and help because Mom and Dad are each other's agents. The son named as the alternate is not able to act because Mom and Dad named each other first. It is now time to create a new DPOA to name their trusted child as their agent first as Mom and Dad are not able to act for each other. (this rule may also apply to Designations of Health Care Surrogates). As a side note, Mom and Dad's DPOA is probably pretty old in the first place, so it likely needs updating, regardless.
Why is the DPOA so important?
A well drafted DPOA can give your trusted agent the power to:
- Avoid probate
- Reduce or eliminate estate taxes
- Create revocable living trusts
- Create irrevocable asset protection trusts for Medicaid purposes
- Avoid a court ordered guardianship
- It can allow your agent to protect assets from the nursing home for medicaid or VA benefits planning!
If you want to learn more about estate planning, please download a free copy of my book, the Top 20 Rules for Protecting Your Florida Estate.