Taking Care of Mom and Dad: Power of Attorney

The most common -- and most effective -- tool for assuring a smooth transfer of authority from your parents to you is a durable power of attorney. This is a legal document that grants you the ability to take care of your parents' legal, financial and medical affairs in the event that they become incapacitated.

It is important to have this legal arrangement set up as early as possible because, once your parents become incapacitated, it is too late to set up a durable power of attorney. That is because it can only be granted if your parents are competent.

Keep in mind that a durable power of attorney is different than a simple power of attorney. A simple power of attorney gives you the legal right to act in your parents' behalf pursuant to whatever action the document describes. For example, they could grant you the power to act on their behalf if they were unable to attend the closing of a real estate sale. All rights granted by a simple power of attorney expire once the grantor becomes mentally incapable -- therefore, a simple power of attorney would not allow you to continue acting in your parents' behalf once they became incapacitated.

The durable power of attorney was invented to be able to bridge the fact that the grantors can no longer legally allow another to act in their behalf once they've become incapacitated.

One version of a durable power of attorney is a springing durable power of attorney. The springing version only becomes operational upon the grantor becoming incapacitated. Your parents can choose who determines their competence -- a doctor (or several doctors) or an attorney that they name. The springing durable power of attorney is useful if your parents are in fine health and are unwilling to grant anyone power over their affairs, but recognize the value of having a power of attorney in place if their health fails.

What happens if your parents become incapacitated and they have not set up a durable power of attorney? For you to be able to act in their behalf, you would need a court to name you as their guardian, a much more costly and onerous process.