Powers of attorney help ensure that there is always a representative acting on your behalf to carry out financial tasks—like managing your bills—when you cannot. A power of attorney is a legal document in which you grant another legal authority to act on your behalf during your lifetime. Depending on state law, powers of attorney may cease if you become incapacitated or incompetent; however, by specifying that you have created a durable power of attorney, you extend the duration of the power of attorney, depending on the terms of the document, to remain in effect if you become incapacitated or incompetent. Powers of attorney automatically terminate upon your death.
During your lifetime, the holder of this power may have financial authority that is quite broad in scope, so you must be certain that you can trust this individual completely. To limit the authority of this representative, consider a springing durable power of attorney, which authorizes another to take over your financial affairs only in the case that you become incompetent or incapacitated as certified by one or more doctors.
While having a durable power of attorney is not required, it is usually a good idea to have it in place to handle unexpected events and ensure that your affairs are managed promptly and appropriately. Without this document, your loved ones will have to petition the court for limited access to your financial accounts if you are incapacitated or incompetent.