A Power of Attorney allows someone else to make financial decisions for you. Powers of Attorney are either limited or general. A durable power of attorney is one that is still good even if your are mentally incapacitated.
General Durable Powers of Attorney are used in estate planning. If you are incapacitated, either mentally or physically, this can result in a Guardianship proceeding. This is a formal legal proceeding in which a neutral professional Guardian is appointed by the court to protect your interests.
The Guardian is represented by an attorney. The Ward (incapacitated person) must pay the legal and administrative costs of the Guardianship and they are considerable.
A properly drafted Power of Attorney is critical if you become incapacitated and want to avoid a Guardianship. The bank and other financial institutions will have their attorney review your power of attorney and decide if they will accept it. If not, a guardianship will be the only way to access those assets.
