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Durable Power of 

There are two basic types of advance directives: durable power of attorney for health care and living will.

A durable power of attorney for health care is a legal document that allows an individual to designate another person to make decisions for the individual if he or she is unable to make decisions due to either physical or mental incapacity or incompetence. The person preparing the durable power of attorney is called the "principal" and the person designated to make the decisions for the individual is called the "agent" or their attorney in fact.

In the other advanced medical directive called "living will," the individual expresses his or her expressed instructions to the physician or to the health care provider as to what course of action should be followed in the event the individual is terminally ill and further treatment is futile. Living wills generally instruct health care providers to not undertake any heroic or artificial measures to keep the person alive once it has become apparent that life in any meaningful sense has seized to exist.

Durable powers of attorney for health care have important advantages over living wills. Living wills are primarily used when a patient is terminally ill and death is imminent, whereas a durable power of attorney for health care can generally be used to delegate authority for health care decisions in all cases of patient incompetence. In other words, a durable power of attorney has much wider application than a living will.

Durable power of attorney, unlike a living will, offers a crucial benefit to the attending physician in that he can talk to the agent who is authorized to make decisions in behalf of the patient. Physicians will feel less vulnerable to legal challenges if they rely upon the instructions of the agent who was personally designated by the incompetent patient than if they were to rely upon the informal consent of a relative. The durable power of attorney for health care resolves uncertainty about who is authorized to consent for the incapacitated patient, especially when relatives are in disagreement among themselves or when the family disagrees with the physician. The concept of durable power of attorney conforms more closely than a living will to the legal model of informed consent.

The obvious disadvantage of durable power of attorney is possible abuse by the agent, if he stands to gain by unscrupulous exercise of the power vested in him by the principal. Such a possibility can, of course, be averted by judicious selection of the agent. Second concern in the exercise of durable power of attorney is that the agent may not exercise the very power when needed that he is authorized and trusted to exercise. A close family member who acts as the agent may be too overwhelmed by grief or too emotionally overwrought to make the critical decision. So there exists the ever-present danger of an agent not faithfully carrying out the patient's wishes or acting against the patient's best interest when those wishes are unclear.

There is one other significant difference between a living will and a durable power of attorney for health care. Agents under a durable power of attorney for health care are not required to act for the principal; they are given the power, but not the obligation. On the other hand, living will directives are obligatory on the physician. Powers granted an agent to act on behalf of the principal are permissive.

Who Should Be Your Agent

Selection of your attorney-in-fact may be the most critical decision you'll make in creating the durable power of attorney. After all, the attorney-in-fact will represent you and act in your behalf, and his actions will affect you in a very personal way, especially during times when you're incapacitated and are not in a position to make decisions for yourself. Your financial well-being and critical decisions about your health care are put in the hands of the attorney-in-fact. His or her judgment and wisdom will be of vital importance to you.

Your Attorney-in-Fact

For many people, the choice of an agent would be simple. For a married person, the most obvious choice may be the spouse. Husband and wife are intimately familiar with their financial affairs and are accustomed to making personal decisions together. However, this does not mean that the selection of the spouse to serve as agent should be automatic. A spouse may not have the experience or inclination to handle the complex financial or business affairs of the family. At the same time, the same spouse may be the perfect person to make health care and medical treatment decisions for the other spouse. In such a case, it might be appropriate to devise two separate durable powers of attorney, one dealing with the health care of the principal while another dealing with the management and control of the property.

The selection of the principal's adult child as agent is another possibility that should be considered, depending upon the age, maturity, judgment of the child, and how close the principal is to the child. A friend, relative, clergyman, even a lawyer are other possible candidates as agents. As a matter of last resort, a corporate fiduciary such as a bank may be considered to serve as attorney-in-fact. Although a corporation may provide continuity, such a choice is bound to prove expensive, impersonal and, often, impractical.

Duties of the Attorney-in-Fact

An attorney-in-fact acts in the capacity of a fiduciary for the principal. His duties may be summarized as follows:

1. The agent must act only within the scope of the authority granted in the power.

2. At all times, he should keep the best interests of the principal in mind. He is required to act in a prudent and reasonable manner.

3. There can be no conflict of interest between the agent and the principal.

4. The agent is required to keep proper records, inventories and accounts of the principal's assets. He may be required to make an accounting to the principal or to a court-appointed conservator.

5. He is not to commingle the properties and funds of the principal with either his or those of someone else.

6. The agent must cease to act for the principal immediately upon revocation of his power or upon the death of the principal.

Successor Attorneys-in-Fact

Taking into account the possibility that an appointed agent may die, resign, or become incapacitated, a provision should be made for the appointment of a successor attorney-in-fact. This can be achieved by naming the successor agent in the durable power of attorney, making the appointment contingent upon the death, resignation or disqualification of the primary agent.

Most states permit delegation of powers in the attorney-in-fact which would authorize him to select a successor attorney-in-fact. Some planners suggest designating in the power a list or class of persons from which the successor agent must be chosen.

Compensation of the Agent

Most state statutes on the durable power of attorney are silent on the subject of remuneration for the attorney-in-fact.

In the absence of any specific provision for remuneration in the power, most states will apply the judicial standard of reasonableness. This may, however, produce undesirable results. At best, such a determination by a court is bound to bring uncertainty and unevenness and may create subsequent problems. It is recommended that specific provisions regarding compensation of the agent should be included in the durable power of attorney itself, or in a separate agreement.

Of course, if a close family member such as the spouse or an adult child is asked to serve as attorney-in-fact, the question of compensation may not even arise. In this event, the power should state the express waiver of any fees by the agent.

Precautions

The durable power of attorney grants your agent sweeping powers over your person and property. Even though the agent you have selected is someone you love and trust, prudence dictates that you take certain precautions to prevent any abuse. One way such an abuse may occur is when the agent takes actions under the durable power of attorney while you're still competent and able to attend to your affairs.

It's of vital importance that you retain full control over the original and all copies of the power at all times. These should be entrusted in the hands of some other person, maybe your lawyer or other responsible party with instructions that they be not turned over to the attorney-in-fact until the need has arisen.

There's yet another area where the possibility of abuse may lie. Often, a person may choose his or her spouse to act as attorney-in-fact which is quite natural. However, occasionally the relationship sours and the marriage is dissolved. Some estate planners suggest that if a spouse is asked to act as attorney-in-fact, a clause should be included in the durable power of attorney which would automatically revoke the power in the event marriage is dissolved. Of course, if the principal is still competent, he would have the option to revoke the power.

Statutory Language

The Uniform Probate Code authorizes the framing of a durable power of attorney so that it will become effective only upon the principal's disability. In other words, the power "springs" into effectiveness when the principal has become incapacitated. Until such occurrence of incapacity, the principal continues to retain full control over his or her affairs. The power of attorney becomes a standby measure, ready to be put into effect if the disability occurs.

In order to make a durable power of attorney "springing", the Uniform Probate Code suggests inclusion of the following words or similar words showing the intent of the principal that the power is to become effective only upon the disability or incapacity of the principal: "This power of attorney shall become effective upon the disability or incapacity of the principal."

Advantages of a "Springing" Power

The main advantage of a "springing" durable power of attorney is to a principal, who is in perfect health at present and is capable of handling his affairs, but is reluctant to grant broad authority to someone over his person and property. A "springing" durable power of attorney allows him to prepare and execute the instrument while he is competent, but defer its effectiveness until such time as it's needed. If the disability never occurs, the power is never transferred. In any event, he has provided for a future event which may force his family to undertake costly, cumbersome and embarrassing court proceedings.

Determination of Disability

The most obvious problem associated with such a power is the difficulty of determining when the power has "sprung" into effectiveness. Therefore, in drafting a "springing" durable power of attorney, care must be taken to provide for a procedure for determination of the principal's incapacity _ without having to go to court. The procedure should be such that third parties dealing with the agent of the principal will be satisfied that the principal has indeed become incapacitated. Anything less than the clear and convincing evidence may prompt third parties to refuse to act without a judicial declaration of incapacity, in which case all the advantage of a durable power of attorney is lost.

The procedure recommended provides for determination of the principal's incapacity when so certified in writing by two licensed physicians not related by blood or marriage to either the principal or the agent. Most third parties including banks, insurance companies, title companies will regard such a medical certification sufficiently acceptable. Of course, in some instances, they may demand evidence of continued incapacity. It may be prudent to have a certificate that is no older than six months to a year.

The other problem for the drafter of a durable power of attorney is how to define incapacity. The language generally used defines incapacity as when the principal has become incapable of caring for himself and when he is not physically and mentally capable of managing his financial affairs.