Recommendations & StrategiesQuestion 72 of 110
A durable power of attorney is an estate planning tool that does which of the following?
a.Automatically transfers assets to heirs at death
b.Sets a fixed asset allocation for a trust
c.Allows a designated agent to act on someone's behalf, remaining effective if they become incapacitated
d.Eliminates all estate taxes
Explanation
A durable power of attorney authorizes a designated agent to make financial or other decisions on the principal's behalf and, unlike an ordinary power of attorney, remains valid if the principal becomes incapacitated. It does not transfer assets at death, which is handled by a will or trust. It has no direct effect on estate taxes.
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