For most people a durable power of attorney is just as important as a last will and testament. Through a durable power of attorney you can appoint another person to serve as your attorney in fact, someone to step in and manage your financial affairs if you become legally incompetent and therefore unable to act for yourself.
What does the word, durable, mean in this context? Generally powers of attorney are only effective if the person granting it is legally competent at the time the attorney in fact attempts to use it. However, Mississippi law provides that one may make a power of attorney durable or continue to be effective even after disability or incompetence if the power of attorney contains a phrase such as “This power of attorney shall not be affected by subsequent disability or incapacity of the principal or lapse of time” or similar words.
What happens when a person becomes legally incompetent without a durable power of attorney? Assets held in the incompetent person’s name cannot be used until a court appoints a conservator to act for that person, a legal process filed in chancery court that is time consuming, tedious and often very costly. Also, long term care planning opportunities will likely be much more limited through a conservator as compared to those available to an attorney-in-fact under a properly drafted durable power of attorney. This is especially important for long term care planning.
It is important to note that durable powers of attorney are not favorites of the business world. Some brokerage firms will honor only their form durable power of attorney, so even if you have a durable power of attorney, you may want to also execute the form required by your broker.
One word of caution is required. Because a durable power of attorney grants broad powers to the attorney-in-fact, it should only be given to someone you completely trust. What if you have someone you trust but are not ready to deliver your power of attorney to him or her? You could use a springing durable power of attorney, which springs into action once you are incompetent. However, banks or other businesses that you want to rely upon your power of attorney may be hesitant to honor it without a legal determination of your legal incompetence. To avoid the need for a conservatorship and your attorney-in-fact acting before you need them to, we offer to hold our client’s Powers of Attorney at no additional charge along with a letter detailing how and when your Power of Attorney would be released to your attorney-in-fact. If you do not have anyone that you trust enough to appoint as your attorney-in-fact, you may want to consider creating a living trust. If you are interest in obtaining a Power of Attorney or have questions about your current Power of Attorney, contact one of our attorney’s to set up an appointment to discuss your concerns