What are Durable Powers of Attorney?

A Durable Power of Attorney is simply a legal instrument that allows one person (called the “agent” or “attorney-in-fact”) to act in your place if you are incapacitated or otherwise unable to act for yourself.  This can be very important if your health deteriorates and you become unable to make financial or medical decisions for yourself.  To avoid a costly and intrusive Conservatorship, another adult must have legal authority to make these for you.

In most estate plans, we deal with 2 different types of Durable Powers of Attorney:

The first is what we call a Durable Power of Attorney for Finance, or DPAF for short.  Suppose you are in a nursing home with advanced Alzheimer’s disease or some other form of dementia. In this case, you are legally incapable of handling your finances.  Who will pay your bills?  Who will handle your investments and other finances?  Who will sell property if this is required to fund your care?  This is where your agent under a Durable Power of Attorney for Finance comes in.  This person will be able to legally handle your finances so long as you are incapacitated.  The alternative if a DPAF is not in place is often a Conservatorship, which is very bad news as I will explain below.

The second type of Durable Power of Attorney we typically deal with is what we call a Durable Power of Attorney for Health Care, or DPAHC for short.  The DPAHC is one form of “advanced health care directive” that is used in the state of California and is the most extensive.

The other type of advanced health care directive is often called a “Living Will” and is often sold by stationary stores. You can even download them for free online. Both types of directive allow you to state how much or how little care you would like to receive in case you have a terminal illness or some other terminal condition.  But a “Living Will” does not allow you to name an agent to make health care decisions for you which can be a big disadvantage.  Only a Durable Power of Attorney for Health Care allows you to name a loved one or other person to make these decisions for you as you have stated in your Durable Power of Attorney for Health Care.

What is a Conservatorship?

Trust me; you do not ever want to be placed in a conservatorship if you can avoid it.  A conservatorship is a court proceeding where a judge appoints a person, called a “conservator” to make decisions for you and handle your affairs.  These proceedings are very costly, time consuming and can make matters public that most people prefer to keep private.  It’s not uncommon for attorney fees to set up a conservatorship to run over $30,000.  This cost is avoidable in most cases with a properly executed estate plan.

Trust me on another point; you do not ever want to be a conservator if you can avoid it.  Being a conservator is a big hassle because virtually everything you do on behalf of the person in the conservatorship is supervised by the court. In most cases, you must make regular “accountings” to the court documenting every penny spent.  So conservatorships are something to be avoided at all costs and this is easily done in most cases with properly drafted Durable Powers of Attorney for Health Care and for Finance.