While the Durable Power of Attorney is important and serves several useful functions, it does have its drawbacks and should be used in conjunction with other documents as part of your comprehensive estate plan.
Drawbacks of the Durable Power of Attorney include:
- Banks and other third parties are not required to recognize your Durable Power of Attorney. They’re allowed to have their own standards, requirements, and forms, and can reject your POA if they determine that it doesn’t measure up.
- It’s hard for people accepting the Power of Attorney to tell for sure whether or not it’s been revoked. This might contribute to their hesitancy to accept it. This isn’t a problem if your agent is dealing with a limited number of institutions or other parties who know your situation well, but issues could arise if your agent moves outside a certain circle.
- Granting an agent authority under a General POA can be like giving them carte blanche to control your assets. This is not a problem if you have complete trust and confidence in your agent. However, an agent who’s not worthy of your trust can wreak havoc with your finances.
Your Durable Power of Attorney should be carefully drafted, and you should carefully consider your choice of agent. Furthermore, your POA should be just one piece of a comprehensive estate plan that also includes a Will, an Advance Healthcare Directive, and possibly a Revocable Living Trust and other documents. Your estate planning attorney can help you decide what your estate plan should include and how best to ensure that your documents are honored.