Durable Powers of Attorney: Simple, Powerful and Cost-Effective

— Mary Anne Vance, Attorney at Law


A Power of Attorney ("POA") is a popular and low-cost document that you can use to manage the affairs of a person who is incapacitated. A carefully-worded POA avoids the need for a costly Guardianship procedure so that you can pay an incapacitated person's bills or consult with their medical team.

You can find many versions of POA forms on the internet or in office supply stores. However, every person's situation is different, so you need to make sure that your POA is customized to suit you and your needs. Also, check to see if the the state you live in requires that you use a specific POA form. For instance, Washington State does not have a standard POA form, though other states do.

The POA is usually "durable," meaning that it remains effective ("endures") when you become incompetent or disabled. The two most common Powers of Attorney are the Financial Power of Attorney, and the Medical Power of Attorney.

There is also a newer POA called a Durable Power of Attorney for Health Care Decisions for Minor Children and Nomination of Guardian of the Person and Estate of Minor Children, which allows a parent to designate who should care for their minor children if the parent becomes disabled.

The Financial Power of Attorney designates a person called the "attorney-in-fact" to make a wide range of financial decisions such as writing and depositing checks, making investment choices, managing a business, and buying or selling real estate. You must be competent when you sign a POA. You do not lose any rights to continue to act on your own once you sign a POA, unless you become incompetent. By signing a POA, you have simply added another person to your decision-making team.

The Medical Power of Attorney designates a person to make personal health care decisions for you such as talking to your medical providers and making treatment decisions if you are unable to make those decisions yourself.

Before you sign a POA, you should consider two important questions:

1. Do you want the POA to be effective immediately when you sign, or do you want the POA to become effective only if you become disabled or incompetent (as determined by your health care provider)?

Those who are elderly or in poor health might choose to have their POA effective immediately upon signing. This immediacy allows their attorney-in-fact to manage their affairs right away. On the other hand, younger, healthy individuals usually do not want other people to be able to access their financial information unless they cannot do it for themselves. They want the reassurance that a doctor must certify, in writing, that they are disabled before the attorney-in-fact can access their accounts.

2. Do you want the attorney-in-fact to have the ability to give your money to your heirs before you die if the gift will lower estate taxes at your death, or will qualify you for Medicaid?

If you have a large taxable estate and are disabled, you may want your attorney-in-fact to make tax-free gifts to your heirs prior to your death so that less tax will be owed at your death. The State of Washington taxes estates greater than $2 million and the federal government taxes estates greater than $5,250,000 for death occurring in 2013. If you have a smaller estate and want to spend it down in order to qualify for Medicaid (nursing home) benefits, your attorney-in-fact might be able to transfer money to your heirs in order to qualify you for this program.


Though you can customize your POA in numerous ways, you cannot give another person the power to change your Will according to Washington law.

Consider carefully the person or company you select as your attorney-in-fact. Many people select a friend or family member because the person is honest. However, managing someone's money is hard work and even the most well-intentioned friend may lack the experience necessary to manage your money well. Instead of naming an inexperienced friend, you can name an experienced professional fiduciary such as a licensed guardian service or a bank trust department. Though these professionals charge a fee, they can be cost-effective because they manage money well and avoid family conflicts.

Disputes regarding a POA can be brought to Court for resolution under the Power of Attorney statute, RCW. 11.94. For instance, a dispute can arise if you are trying to use an older POA because banks sometimes refuse to honor a POA, saying it is "too old." The bank is wrong to refuse to honor an older POA, and you can use this Washington law to force the bank to honor it. A POA is valid until the person dies or revokes it.

A POA is a powerful and cost-effective estate planning tool. Consider if now is a good time to sign a POA. If you already have a POA, carefully review it to see if you need to update the information. Taking time to draft, review, or update a POA is important, not only for you, but for your family and loved ones.

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Contact me if you have specific questions or would like to schedule an appointment.

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Seattle, WA Estate & Trust Lawyers

Mary Anne Vance
Reed Longyear Malnati Corwin & Burnett
801 2nd Avenue, Suite 1415
Seattle, WA 98104
(206) 624-6271

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