Why DPOA’s (Durable Powers of Attorney) are So Necessary
Many people believe that if they have a trust and a trustee they don’t need a Durable Power of Attorney (“DPOA”). That couldn’t be further from the truth. Although you may have a clause in your trust that deals with a successor trustee stepping into your shoes if you should become incapacitated for any reason (e.g., stroke; accident), that trustee will only have control over the assets you have placed in your trust. You will still need someone you can rely on to handle not only your personal affairs, like the type of care you might need, what facility may best suit your needs, etc., but also someone who is authorized to get access to your non-trust accounts, talk to your insurance providers, talk to your investment advisers, etc. That person will be your agent under a DPOA. Without making arrangements for this in advance and designating someone of your choice, you may be stranded without anyone to perform these functions for you, in which case the court might order a conservatorship of your person and appoint a total stranger to fulfill these functions.
You shouldn’t confuse this type of DPOA, which is commonly referred to as a DPOA for finances, from a DPOA for health care, which is now generally called an Advanced Health Care Directive. You should consult with your attorney as to whether your DPOA for finances should be one that takes effect now or if you should have a “springing” DPOA which takes effect on your incapacity. In either case, your agent will have a fiduciary obligation to perform his or her tasks for your benefit.