What is a Durable Power of Attorney for Finances?

A durable power of attorney for finances is a reliable legal document in which you name someone who will make your financial decisions if you become unable to do so yourself. This person is called your attorney-in-fact, or in some states, your agent. (Your document will include the correct term for your state.) If you ever do become incapacitated, the durable power of attorney will likely appear as a minor miracle to those who are close to you.

WillMaker allows you to create your own durable power of attorney for finances. Using WillMaker, you can:

name your attorney-in-fact
appoint someone to replace your attorney-in-fact if he or she cannot serve, and
state exactly how much authority you want your attorney-in-fact to have over your finances.

In addition to your durable power of attorney for finances, WillMaker prints out a number of related documents. The first of these is an information sheet for you to give to your attorney-in-fact, explaining what his or her responsibilities will be. There are also several forms designed to make your attorney-in-fact's job easier—including forms for delegating tasks to others and resigning from the job if that becomes necessary. Finally, we provide a form that you can use to revoke your durable power of attorney if you change your mind.

Here are some key terms that will come up repeatedly as you make your power of attorney. Better to understand them from the outset.

Principal. The person who creates and signs the power of attorney document, authorizing someone else to act for him or her. If you make a durable power of attorney for finances, you are the principal.

Attorney-in-Fact (Agent). The person who is authorized to act for the principal. In many states, the attorney-in-fact is also referred to as an agent of the principal—and some states use the term "agent" exclusively. Your power of attorney will include the correct term for your state.

Alternate Attorney-in-Fact (Alternate Agent). The person who takes over as attorney-in-fact if your first choice cannot or will not serve. Also called successor attorney-in-fact or successor agent, depending on the state.

Durable Power of Attorney. A power of attorney that will remain in effect even if the principal becomes incapacitated. This is the kind of power of attorney you make with Nolo's Durable Power of Attorney for Finances.

Incapacitated. Unable to handle one's own financial matters or health care decisions. Also called disabled or incompetent in some states. Usually, a physician makes the determination.

Your Love Ones Can't Just Sign Your Checks

If someone becomes incapacitated, panicky family members may consider just faking the signatures necessary to carry on routine financial matters. It may seem perfectly acceptable to sign Aunt Amanda's name to a check if the money is used to pay her phone bill.

But this is forgery—and it's a crime. The law is strict in this area to guard against dishonest family members who might loot a relative's assets.

Forging a signature on checks, bills of sale, tax returns or other financial documents may work for a while, but it will probably be discovered eventually. And then the court proceeding everyone was trying to avoid will be necessary—and a judge will not be eager to put a proven liar in charge of a relative's finances.

When you make a power of attorney you can give your loved ones legitimate and legal power to do many financial tasks, including signing checks on your behalf.

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