After a will and a living will/healthcare proxy, a durable power of attorney (DPA) is probably one of the most important documents every household should have. The DPA gives another person or institution the right to act on your behalf.
The DPA comes in handy if you are incapacitated (e.g., an accident) and someone else must pay the bills or sign legal documents. Even if everything is held jointly, a DPA would allow a spouse to sell joint assets if necessary.
If you’re concerned about granting so much power to another person, a “springing” DPA might be the answer. It takes effect only under specific circumstances (e.g., if your physician or two other Doctors agree that you’re incapacitated.)
According to Lynn Brenner’s Smart Questions to Ask Your Financial Advisers
, a normal power of attorney is not sufficient because it expires if you become legally incompetent. A DPA doesn’t expire until you revoke it or die.