Durable Power of Attorney vs. Non-Durable Power of Attorney

What is the difference between a Durable Power of Attorney and a Non-Durable Power of Attorney?

A Power of Attorney is a document that allows someone to give authority to an individual that they choose to manage their legal and financial affairs on their behalf. The authority can be very specific to only certain transactions, standard to include the powers outlined in the statutory form, or it can be very broad and include provisions dealing with more complex matters such as trust planning, tax planning, and long-term care asset protection.

The key difference between a durable and non-durable power of attorney lies in what happens when the person who granted the power (the "principal") becomes incapacitated or mentally incompetent. A durable power of attorney remains in effect when the principal becomes incapacitated. A nondurable power of attorney is no longer in effect if the principal becomes incapacitated.

When signing a power of attorney for a limited transaction, such as representing you in the sale of real estate or assisting you with managing an investment, it is possible that you only want the individual to have authority while you have capacity and can call the shots. In this case, a “non-durable” power of attorney would serve your purpose. In the event you become incapacitated, your agent will no longer have authority to act on your behalf.

However, if you are signing a power of attorney as part of your estate planning, to make sure that if you become incapacitated, the individual you appoint will have authority to act on your behalf, your power of attorney must be a “durable” power of attorney.

Durable Power of Attorney:

Remains effective even if the principal becomes incapacitated or mentally incompetent
Contains specific language stating it will survive the principal's incapacity (often called a "durability clause")
Continues until the principal's death or until formally revoked while the principal is still competent
Most commonly used for estate planning and long-term care planning purposes
Essential for situations where someone may need ongoing financial or healthcare decision-making assistance

Non-Durable Power of Attorney:

Automatically terminates if the principal becomes incapacitated or mentally incompetent
Only remains valid while the principal maintains mental capacity
Becomes void precisely when the principal would most need someone to act on their behalf
Useful for specific, temporary situations when the principal is traveling or temporarily unavailable
Not useful for long-term care planning or estate planning purposes

Practical Implications: The durability feature is crucial for estate planning because incapacity is often when families most need someone to manage financial affairs, make healthcare decisions, or handle legal matters. Without a durable power of attorney, families may need to go through expensive and time-consuming guardianship or conservatorship court proceedings to gain authority to act for an incapacitated loved one.

It is critical to note that even if your power of attorney is “durable,” it is still critical that your power of attorney include provisions that you may require in the future. A basic statutory power of attorney does not have provisions that would allow your agent to protect your assets or income in the event you needed Medicaid long-term care, or provisions that would allow your agent to perform tax planning to minimize estate taxes. You must be sure to consult with an elder law attorney to make sure that the necessary provisions are included to maximize the planning strategies that your agent may need to perform on your behalf in the event you become incapacitated and need long-term care.

For these reasons, it is important to seek the assistance of an elder law attorney to prepare a durable power of attorney for you as one of the foundational documents you will need for a comprehensive estate plan.