Power Of Attorney
A power of attorney is a document in which one person (the “principal”) appoints an agent to act on the principal’s behalf. The agent appointed in the power of attorney is called the “attorney-in-fact”, although many persons refer to the person who is appointed as the “power of attorney”. In the absence of a power of attorney executed while a person is competent, it may be necessary to petition the court to appoint a guardian or conservator to deal with the incapacitated person’s assets. This is true even between a husband and wife, particularly in cases where each spouse owns bank accounts, securities, or real estate in his or her name or where they jointly own real estate that may need to be sold or refinanced. Thus, without a written power of attorney, even a spouse or adult child would not have legal authority to deal with the property or handle the affairs of another person. With an existing executed durable power of attorney, a person is able to choose for himself in advance who will handle his property and affairs, without the cost, inconvenience, and publicity of a court supervised guardianship.
A durable power of attorney is relatively simple and inexpensive. It is an extremely flexible instrument: it can be made as broad or as limited as the principal wishes. It can be drafted either to be effective immediately upon signing or to be effective only upon the principal’s incapacity (a “springing” power of attorney). A springing power of attorney does not go into effect if the principal never becomes incapacitated. However, if the principal does become incapacitated (this is usually to be determined by the written evaluation of one or more doctors), there is then a preplanned, legal method to handle the principal’s affairs, without court review or approval and without public notice or exposure.
A principal can always revoke a power of attorney as long as he or she is competent. Under current Indiana law, a power of attorney can be revoked only by a written instrument signed by the principal. Apart from revocation, a durable power of attorney will terminate upon the death of the principal or on a termination date specified in the power of attorney.