Durable Power of Attorney
Many clients tell us during their initial estate planning consultations that they are concerned about what happens to their assets when they die. We are always interested in making sure that we plan for the transfer of assets on death, but it is also important to think about who will control your assets if you become incapacitated and unable to manage them yourself. Very frequently at Schulz Harrison, LLC, we recommend that a Durable Power of Attorney is created to help answer this question.
A durable power of attorney allows you to designate a person (your "attorney-in-fact") with the power to make financial transactions on your behalf. You can elect to make these powers to access and control your finances available only upon your disability or incapacity. This means that your attorney-in-fact would be required to obtain a letter from a physician certifying that you are unable to manage your affairs before accessing and exercising control over your assets. It can also be drafted to become effective immediately, without the need for physician certification.
This document is fully revocable for so long as you are competent to revoke it. That is what is meant by the term "durable." If you prefer that the power of attorney only be effective for a limited period of time, or that the power granted by that document are limited in some respect, instead of creating a Durable Power of Attorney, you can created a "Limited Power of Attorney" that defines the limits of the powers you are granting.
Your attorney-in-fact is accountable for all actions they take over your assets. Actions taken by your attorney-in-fact must be for your benefit or consistent with your prior use of your assets. They are obligated to track what transactions they enter into using their powers, and to prepare a written accounting of those transactions if one is requested. Indiana has detailed laws regarding who may request such an accounting, how often it may be requested, and what form the accounting must take. Your attorney-in-fact should carefully document every transaction they make using this power so that there is no question that funds were used for your benefit.
Finally, a person whom you have designated as your durable attorney-in-fact will be entitled to preference as guardian over your estate in the event you are incapacitated and a guardianship action is commenced.
Disclaimer: This summary is not intended to be comprehensive, and should not be construed as legal advice for your particular situation. Nothing in this website is intended to substitute for legal representation.