What is a GDPOA?

General Durable Power of Attorney for Finances

A general durable power of attorney is a legal document in which an individual, called the principal, appoints someone they trust, called the agent or attorney-in-fact, to complete financial transactions on behalf of the principal.

It is “general” because it is comprehensive in scope, giving the agent the authority to pay bills, enter into contracts, and otherwise step into the principal’s shoes for financial transactions. It is “durable” because it endures the principal’s incapacity, meaning that it remains effective even if the principal becomes incapacitated. If someone becomes incapacitated without a valid durable power of attorney in place, the principal’s loved ones will have to go through a conservatorship proceeding in court to appoint a conservator for finances, which can some time to put in place and be expensive to properly set up.

By executing the general durable power of attorney, the principal gives the agent the authority to transact on the principal’s behalf with banks, brokerage firms, other financial institutions. If the principal also has a revocable trust, the general durable power of attorney is used to manage the products that are not in the trust, such as retirement plans, life insurance, and tax-deferred annuities. It also gives the agent access to the principal’s digital assets.

In choosing an agent, it is very important that the principal chooses someone that is trustworthy with finances. The agent should be a responsible adult who will take actions in the principal’s best interests and not treat the principal’s assets as their own.
A general durable power of attorney for finances is different than an advance health care directive. It also ceases to have any effect when the principal dies and cannot be used to wrap up post-death administration of the principal’s estate. It is crucial to have a comprehensive estate plan that gives all the tools necessary to help you adjust when the unexpected happens.

Give Brockway Law a call if you have any questions.
Disclaimer: The information contained in this article is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation.