A properly drafted power of attorney should be part of any comprehensive estate plan. This document allows you (not the court) to appoint an agent (your “attorney-in-fact”) to act and make financial decisions on your behalf in case you are unable to.
I help residents in Rhode Island and Massachusetts craft personalized, validly executed durable powers of attorney to ensure they are protected and the right people are in place in the event of incapacity.
Learn More About Powers of Attorney
What is a Durable Power of Attorney (DPOA)? A Durable Power of Attorney is a legal document where a competent adult (the “principal”) appoints a trusted person (the “agent” or “attorney-in-fact”) to manage their financial and legal affairs. The word “durable” is the most important part—it means the document remains legally valid and in effect even if you later suffer a disability or lose the mental capacity to manage your own affairs, such as from a stroke or dementia.
Why Do You Need One? The law assumes that adults have the capacity to manage their own affairs, but if that capacity is lost, your family does not automatically gain the right to manage your individual accounts—even if you are married or hold some property jointly. Without a DPOA in place, your family would have to go to Probate Court to have a “guardian” or “conservator” appointed to manage your money.
When Does It Take Effect? When setting up your DPOA, you have two choices for when your agent’s authority begins:
- Immediate (Present Grant): The agent’s power begins the exact moment the document is signed. This provides a seamless transition and avoids “red tape” in emergencies.
- “Springing” Power: The power remains dormant and only “springs” into existence if and when a doctor formally certifies in writing that you are incapacitated. While some people prefer this because they do not want to give up control too soon, it can cause dangerous delays in a crisis because doctors are often slow or hesitant to legally declare someone incompetent.
What Can Your Agent Do? If you grant a “general” power of attorney, your agent can step into your shoes to do almost anything you could do financially. This includes paying your bills, buying or selling real estate, accessing bank accounts, dealing with Medicare or Social Security, filing taxes, and managing your digital assets (like online banking and emails).
However, there are certain sensitive actions—sometimes called “hot powers”—that an agent cannot perform unless you explicitly write them into the document. For example, an agent cannot make financial gifts (which is often necessary for Medicaid/nursing home planning) or create and amend trusts on your behalf unless the DPOA specifically authorizes them to do so.
What Are the Agent’s Duties? Your agent is legally considered a “fiduciary”. This means they are bound by law to act loyally, in good faith, and strictly for your benefit. They are strictly prohibited from self-dealing (unless explicitly allowed in the document) and must keep accurate records of all transactions they make with your money.
Can It Be Changed or Cancelled? Yes. You retain the right to revoke or cancel your DPOA at any time, as long as you still have the mental capacity to do so. If you revoke it, you must notify your agent and any banks that have a copy on file. Finally, a DPOA automatically expires the moment you pass away; it cannot be used by your agent to manage or distribute your estate after death.
A Warning About “Staleness” (The Bank Problem) Even though a DPOA is legally valid until it is revoked or you pass away, banks and financial institutions are often fearful of liability and may refuse to honor a document that is several years old (claiming it is “stale”). To ensure that banks will respect the document when it is truly needed, it is highly recommended to update and re-sign your DPOA every few years.
What Happens if My Agent Cannot Serve? (Successor Agents) You should always name a backup. Naming at least one successor (backup) agent is highly recommended and is a crucial part of planning for your incapacity.
If you only name one agent and that person dies, resigns, or becomes incapacitated before or during your own incapacity, your Durable Power of Attorney becomes useless. If you have no backup agent in place, your family will be forced to go to the Probate Court to have a conservator appointed to manage your assets—defeating the entire purpose of creating the document in the first place.
When naming a successor agent, the document should include clear, objective instructions on how and when the backup takes over. For example, the document should state that the successor steps in if the primary agent resigns in writing, dies, or if a physician certifies in writing that the primary agent is no longer capable of serving. Having this clear standard prevents confusion and makes banks and third parties much more comfortable recognizing the authority of your backup agent.