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Durable Power of Attorney vs. Power of Attorney
A durable power of attorney is a type of power of attorney that endures even when the principal loses capacity.
A power of attorney is a legal document executed by the principal authorizing the agent to act on behalf of the principal. The actions an agent can do on behalf of the principal depend on the acts authorized by the principal in the power of attorney document. It can be limited to only one type of transaction (i.e., real estate transactions) or it can range to two or more or all types of transactions (i.e., chattel and goods transactions, bond, share, and commodity transactions, banking transactions).
New York Statutory Form of the Power of Attorney
The New York statutory form of the power of attorney is generally a durable power of attorney, unless it is modified under the modifications portion. As such, if there are no modifications, a New York power of attorney is a durable power of attorney that endures even after the principal loses capacity. When the principal loses capacity, the power of attorney continues and the principal cannot revoke the power of attorney. Only a court can revoke a durable power of attorney of a principal that has lost capacity.
Other Types of Powers of Attorney
There are other types of powers of attorney, such as a springing power of attorney and a nondurable power of attorney.
A springing power of attorney is a power of attorney that only becomes effective upon the principal’s loss of capacity or the happening of a contingent event.
A nondurable power of attorney, on the other hand, is a power of attorney that ceases to be effective when the principal loses capacity. As previously mentioned, the New York statutory form of the power of attorney is presumed to be durable unless modifications are made to the document.
The Need for a Durable Power of Attorney
A durable power of attorney is an effective legal tool to prevent the costly expense of guardianship. When a person loses capacity, the person generally loses the capacity to contract. They lose the capacity to enter into agreements. For example, when a real estate owner loses capacity, he cannot enter into contracts, such as lease agreements, relating to his real estate, unless he has an agent in a durable power of attorney who can act on his behalf. Without a durable power of attorney, family members have to file a petition for guardianship in order to manage the incapacitated person’s assets.
Guardianship proceedings take longer and are more costly than a durable power of attorney. For this reason, a durable power of attorney is an important legal tool in estate planning.
Drafting a durable power of attorney requires the counsel of an estate planning attorney. Granting a vast amount of power to an agent requires a thorough understanding of a power of attorney’s consequences. An estate planning attorney can also help you modify a power of attorney to ensure safeguards are provided in case there is abuse.
Should you need assistance in POA drafting, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].
About the Author
Albert Goodwin Esq. is a licenced New York attorney with over 17 years of courtroom experience. His extensive knowledge and expertise make him well-qualified to write authoritative articles on a wide range of legal topics. He can be reached at 212-233-1233 or [email protected].
