1) If a person becomes unable to handle legal affairs, perhaps because of Alzheimer’s Disease, the law provides for a Guardianship. This process can be cumbersome and expensive, requiring filing an application in probate court, legal notice to the proposed Ward, evidence that a Guardianship is needed, posting a bond, filing an inventory, applying for permission to sell assets or spend funds. This generally requires the assistance of a lawyer. Also, additional legal fees are incurred for as long as the Guardianship lasts, which could be years or even decades. All this is meant to protect the person who needs the Guardian, but if you trust someone enough to give them a General Durable POA, a lot of money and trouble may be avoided. For long term marriages, spouses frequently execute reciprocal POAs.

2) A POA ceases to be effective when the principal dies.

3) Although most POAs are effective when signed (even without a loss of capacity by the principal), they are rarely used until a disability makes their use necessary. However, there is some risk of misuse which is explained during the interview. A POA gives the agent, also called the attorney-in-fact, the authority to act for the principal, but it also creates a fiduciary relationship to always put the interests of the principal first. Detailed records should be kept by the agent.

4) Durable refers to the ability of the POA to remain effective even after a person loses legal capacity.

5) General refers to the fact that the POA is intended to permit the attorney in fact to perform virtually any legal acts to the same degree that the principal could. Since people lose the ability to perform any acts when they die, the agent has no power to act once the principal dies. Thus, a POA is not a substitute for a Will or a Trust.

6) Specific or limited POAs are limited authorizations to perform one or more specific legal acts, such as buying real estate or selling stocks. If you own real estate or stocks, especially if in one name only, a specific POA may be a good idea.