By Stan Butterfield

A power of attorney (POA) is a document you sign appointing someone to be your agent to conduct business on your behalf. There are a variety of kinds of POA’s, but the most common kind, in my experience, is a durable power of attorney (DPOA). The word “durable” in this situation means that the document remains in force even if you are incapacitated. Any POA is only in force while you are alive and sometimes for an even shorter time. Under a DPOA your agent can perform acts on your behalf no matter what your condition. So if you are in a coma, suffering from dementia caused by Alzheimer’s or some other disease, or if you are in a host of other situations that would prevent you from being able to manage your financial affairs; a DPOA makes it possible for an agent to manage your affairs. An agent under a DPOA can pay bills, file tax returns, redirect mail, manage your bank and credit card accounts, sell your home, or take out a loan on your behalf, the financial power is almost limitless.

a person signing paper documents while standing next to another person.

General Considerations

In most cases when I write an estate plan for a client I tell them they need three documents, a will, a durable power of attorney, and because I practice in Oregon, an advance health directive. There are specific pieces of advice I give regarding each one of these documents and sometimes that advice is unique to that client. This is one reason I generally recommend people retain an attorney to write these documents, it is the best way to ensure that they protect themselves from mistakes that could be very costly. I caution against just downloading a POA of any kind from the internet, if you don’t know what you are doing you can end up unintentionally frustrating your own plans and purposes.

Additional Warnings

When it comes to a DPOA, however, I do have some warnings and recommendations that are nearly universal. The first thing I mention is that a DPOA is a very powerful document and gives your agent the keys to your bank accounts and the power to buy and sell anything you own. So it is imperative that the person you appoint be completely trustworthy. From the moment you sign a DPOA the person you appoint as your agent has the power to help you or harm you in very significant ways. Even though the agent is obligated to use their power to act in your best interest; many people have instead abused the power they were given as an agent, for their own gain. If this happens, the law allows them to be punished, but this is often only after money and property have been lost forever.

No One To Blame

Because of the potential for abuse, the law in Oregon protects banks and other financial institutions from being held liable for relying on a DPOA when the agent was self-dealing. Sometimes I have seen banks hide behind this protection when it should have been obvious that their customer was being victimized. On the other hand, I have also seen many situations where banks were the first people to bring this kind of abuse to the attention of law enforcement. The bottom line for you is be very careful about who you appoint as your agent.

None Of This Is Permanent

You should also know that as long as you are competent you can revoke a DPOA at any time. This allows you to change or “fire” a person you have appointed as an agent if you have reason to believe they would no longer be a good choice. This change could be for lots of reasons from doubting the person would really act in your best interests to the person no longer being able to function because they have moved away or because they are no longer competent.

To Your Advantage

Despite the possible abuses I have mentioned, I still believe that a DPOA is a very important document that almost everyone should have. As long as you appoint some one trustworthy, a DPOA can save you a lot of money and trouble. Without a DPOA if you become incapacitated the people that care about you are forced to go to court to gain the power to help you. (I have a much more detailed explanation of this process regarding guardianships and conservatorships if you click here.) Get a Durable Power of Attorney, you will be glad you did.

Stan Butterfield is a probate attorney that does estate planning. Stan’s firm is located in Dallas, Oregon. He regularly practices in Polk, Marion, Linn, and Yamhill counties. If you believe Stan could help you, give him a call—(503)623-2427.