Durable Power of Attorney

Durable Power of Attorney

A power of attorney (POA) is a legal document that gives someone else the power to act on your behalf when you can't make decisions for yourself. You are the principal and you appoint someone who will be referred to as your agent or attorney-in-fact to act on your behalf.

POAs have been in existence for years, whether it is a General POA, where the principal gives the agent very broad powers, or a Limited POA, where the principal only gives the agent certain limited powers, such as the ability to sign their tax returns, handle a particular financial transaction, or access their confidential records.

A problem arises, however, with each ordinary type of POA whenever the principal becomes mentally incapacitated. This is because an ordinary POA becomes ineffective the moment the principal becomes incompetent or mentally incapacitated.

This poses a very legitimate concern because it questions the validity of a POA in those circumstances, and if the validity of the POA is in question in those circumstances, then it cannot be relied upon. To solve this problem, legislatures created what we know as a Durable Power of Attorney (DPOA).

What is a Durable Power of Attorney?


A DPOA is no different than a general POA or limited POA, except that it is drafted to survive the incompetence or incapacity of the principal. In other words, it is made to be durable.

Durable means that the DPOA remains enforceable should you become incapacitated. Unless a POA is durable, it will become ineffective the moment you become mentally incapacitated.

Therefore, the first requirement for a DPOA is that there is a written document, and secondly, that the document contains words which clearly indicate that you intended it to be effective after you become mentally incapacitated.

Types of Durable Power of Attorneys

There are essentially two types of DPOAs:

  1. An immediate power of attorney; and
  2. A springing power of attorney

An immediate power of attorney is effective right away, while a springing power of attorney only kicks in when you become incapacitated.

What’s more, a DPOA can be issued to give the agent authority to handle both your medical and financial issues. However, it may be a good idea to create two separate documents, for example:

  1. One DPOA to be given to your attorney or accountant, who will handle your legal and/or financial matters (A DPOA for Finances); and
  2. Another DPOA to be given to someone close to you whom you trust to make medical decisions on your behalf (A DPOA For Healthcare, also called a Healthcare Proxy)

Note: A DPOA should only be given to someone you trust greatly. It is also a good idea to name an alternate agent or agents, in case your first choice of agent can't act.

Why Do You Need A Durable Power of Attorney?

A DPOA is a good estate planning tool to have in place when the unfortunate happens and you are left unable to communicate for yourself or handle your own affairs. If the POA is not durable, your family may have to go to court to seek a guardianship in order to manage your assets or make medical decisions on your behalf.

By executing a DPOA, if you are injured in an automobile accident or hospitalized, and cannot handle your own affairs, you will have already named a person to act for you. By simply presenting the DPOA to the relevant third party, your agent can sell your house, pay your mortgage, sue someone, and/or choose your treating physician and make medical decisions on your behalf.

In fact, support for land trusts in Colorado is implied by case law. What's more, Colorado title companies issue title insurance for and deal with transfers to and from land trusts on a regular basis.

A third party is any person or institution, other than you or yourself or your agent, for instance, a vendor, service provider, bank, or health care provider to which your agent submits the DPOA as evidence of his or her legal right to act on your behalf.

What Powers Are Granted Under A Durable Power of Attorney?

A DPOA is an estate planning tool that can give your agent authority to do many things on your behalf. In fact, your agent can be granted the power to do virtually anything that you can do.

Most of the functions of a DPOA are related to finances and medical issues. However, a good DPOA should also allow your agent to plan for elder law issues on your behalf. In other words, it should give your agent the power to make gifts and move assets around to a create trusts that will protect your assets if you become incapacitated or need long term care.

Contact an Experienced Colorado Estate Planning Attorney For More Information

In matters of importance and of a legal nature, it is always best to consult with an experienced attorney for advice. For more information regarding durable powers of attorney, or to find out about creating a durable power of attorney in Colorado, contact an experienced Colorado estate planning attorney.