What is a durable power of attorney?
A durable power of attorney (DPOA) is a legal document authorising someone to make financial and legal decisions on your behalf. 'Durable' means it stays in effect if you become mentally incapacitated — which is precisely when an ordinary power of attorney would stop working.
Why the word durable matters
A standard power of attorney ends the moment you lose capacity. That is the opposite of what most people intend, because incapacity is the situation the document is meant to cover.
Without one, nobody can pay your mortgage, file your taxes or manage your accounts until a court appoints a conservator or guardian — a process that typically takes months, costs thousands and is a matter of public record.
The main types
- Durable (immediate): effective on signature and continues through incapacity — the most practical option
- Springing: only takes effect once a doctor certifies incapacity, which adds delay and disputes
- Limited or special: authority for one defined task, such as closing a single property sale
- Medical power of attorney: a separate document covering healthcare decisions, not finances
What an agent can and cannot do
The agent owes you a fiduciary duty and must keep their money separate from yours. Choose someone organised and trustworthy over someone senior in the family, and always name a successor in case the first choice cannot serve.
- Can: pay bills, manage bank and investment accounts, file taxes, deal with insurers, manage property
- Can: apply for benefits and handle government correspondence on your behalf
- Cannot: make healthcare decisions unless a medical POA also names them
- Cannot: change your will, or act at all after you die — authority ends at death
- Cannot: make gifts to themselves unless the document expressly allows it
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How to set one up
- Use your state's statutory form where one exists — banks recognise it more readily
- Sign in front of a notary; some states also require witnesses
- Give certified copies to your agent, your bank and your brokerage in advance
- Ask your financial institutions whether they also require their own internal form — many do
- Review every few years; institutions sometimes resist documents more than five years old
FAQ
What is the difference between a POA and a durable POA?
A regular power of attorney ends if you become incapacitated. A durable power of attorney continues, which is what makes it useful for illness, injury or cognitive decline.
When does a durable power of attorney take effect?
An immediate DPOA takes effect as soon as it is signed. A springing DPOA takes effect only when a physician certifies that you lack capacity.
Can a durable power of attorney be revoked?
Yes, at any time while you have capacity. Revoke in writing, retrieve the copies, and notify every institution that holds one on file.
Does a durable power of attorney cover medical decisions?
Not by itself. Healthcare decisions require a medical power of attorney or healthcare proxy, which is a separate document.
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