A financial durable power of attorney is a reliable way of ensuring that someone you trust will manage your finances in the event that you are unable to make decisions due to mental or physical incapacity.
If you have a family, executing such document is a very smart move your family will appreciate it. In the absence of such document, a court proceeding becomes inevitable should you become incapacitated. Your husband, wife, partner, or next of kin will have to go through special court procedures that apply to this situation.
The document becomes effective immediately after execution. A lot of couples have each signed separate durable financial powers of attorney just in case one of them suddenly becomes incapacitated. The law requires you to indicate if it’s a durable power of attorney or else, the document is deemed terminated in the event you have become incapacitated.
You may also expressly state in the document that the document becomes effective only after a medical physician has issued a certification confirming your impairment. Lawyers call this a springing durable power of attorney inasmuch as effectivity springs or is triggered by an event. Some individuals, however, prefer not to include this feature since it could delay action on part of the agent.
The job of an agent
Signing a durable financial power of attorney is tantamount to granting a person whom you have appointed to the power to decide on your behalf. Some states like Colorado refer to this person as the “agent” while some states call him your “attorney-in-fact”.
Usually, a principal grants very broad power to an agent in matters of finances but no ruling is stopping you from granting very little powers. It’s up to you actually.
The usual powers of an agent indicated in most durable financial powers of attorney include the following:
(Select “Forms” tab to view standard durable financial powers of attorney that conform with Colorado state laws).
While these are typical powers granted unto an agent, it’s deemed that once the document is executed he must ensure that there will be no conflict of interest arising from the performance of his agent duties.
Upon the death of the principal, the efficacy of the durable financial power of attorney ends as well. This clearly sends the message that your agent can’t handle your affairs upon your passing.
You cannot authorize your agent to take care of your funeral, accomplish burial requirements, and cede or transfer real estate property to persons entitled to inheritance.