A durable power of attorney is a document that allows a person to appoint a trustworthy agent for the purpose of making ongoing financial and/or medical decisions for the benefit of the person. The person making the power is known as the principal, and the person appointed by the principal, while not typically not attorney, is known as the agent or the attorney in fact. Most people choose their spouses or their children to act as their agents for these purposes.
A durable power of attorney typically takes effect upon the physical or mental incapacitation of the principal. A durable power of attorney remains effective throughout the period of the principal's incapacitation, and terminates upon the death of the principal. Typically, the designated agent is authorized through the durable power of attorney to handle virtually any financial matter for the benefit of the principal, including buying or selling real estate, exercising all manner of banking powers, making elections on insurance or retirement plans, filing and preparing tax returns, entering into contracts, running a business, or conducting any type of activity that the principal could have conducted himself or herself. If the durable power of attorney is for medical purposes, then the agent is authorized to make medical decisions for the benefit of the principal, until the principal either recovers and can once again make his or her own medical decisions, or until the death of the principal.