Power Of Attorney vs Durable Power Of Attorney
Power of Attorney is a written document that is utilized by an individual, to appoint or authorize another person to act or represent himself during financial transactions. The person who is granted power of attorney can act or perform certain functions on behalf of the person making this document, also known as the principal. There is another phrase Durable Power of Attorney that is used under certain circumstances. There are many similarities between power of attorney and durable power of attorney. However, despite similarities and overlap, there are differences between power of attorney and durable power of attorney that will be talked about in this article.
Power of Attorney
Power of attorney is a powerful tool that allows a person to appoint another person to act on his behalf under certain circumstances. There can be situations when a person is unavailable or ill and unable to take decisions. Power of attorney enables one to have another person act on his behalf. This person steps into your shoes and becomes your agent. He is authorized to sign checks on your behalf, file your tax returns, and even sign business contracts when you are abroad or ill and hospitalized for some time. He can run your business, deposit and withdraw funds from your bank account, and do virtually everything related with finances as long as he holds your power of attorney.
Durable Power of Attorney
If you appoint someone to act on your behalf, you are granting him power of attorney. If you add a clause that your agent shall continue to act on your behalf in the eventuality of you suffering a physical or mental incapacitation, it becomes a durable power of attorney. Durable power of attorney remains in effect even though you become incapacitated. However, durable power of attorney ends in the eventuality of your death.
What is the difference between Power Of Attorney and Durable Power Of Attorney?
• Durable power of attorney is a special kind of power of attorney.
• Though it serves the same purpose as a general power of attorney, durable power of attorney continues to function in case of a mishap incapacitating you physically or mentally.
• Any general power of attorney can be converted into a durable power of attorney by adding a special clause to this effect.
• Durable power of attorney becomes ineffective in the case of death of the principal.