Ms. M was born in 1918 and grew up in Fairfield County [South Carolina]. She moved to Greenville, where she majored in sociology at Furman University and later worked for the South Carolina Department of Social Services. After retiring, Ms. M returned to Fairfield where she lived on her family farm with her brother, a dentist, until his death in the early 1980s. Ms. M never married.

   Dr. Gaddy was Ms. M’s physician and a close family friend. * * *

   Conversely, Ms. M had little contact with many of her relatives, including Appellants [third cousins of Ms. M].

   In 1988, * * * Ms. M then executed a durable general power of attorney (1988 durable power of attorney) designating Dr. Gaddy as her attorney-in-fact. * * *

   * * * Concerns about Ms. M’s progressively worsening mental condition prompted Dr. Gaddy to file the 1988 durable power of attorney in November 1995. Pursuant to the 1988 durable power of attorney, Dr. Gaddy began to act as Ms. M’s attorney-in-fact and assumed control of her finances, farm, and health care. His responsibilities included paying her bills, tilling her garden, repairing fences, and hiring caregivers.

   In March 1996, Dr. Gaddy discovered Ms. M had fallen in her home and fractured a vertebra. Ms. M was hospitalized for six weeks. During the hospitalization, Dr. Gaddy fumigated and cleaned her home, which had become flea-infested and unclean to the point where rat droppings were found in the house. Finding that Ms. M was not mentally competent to care for herself, he arranged for full-time caretakers to attend to her after she recovered from the injuries she sustained in her fall. He made improvements in her home, including replacing motheaten area rugs with new rugs and upgraded her kitchen to enable caretakers to prepare her meals. Dr. Gaddy also made plumbing repairs to the house, and took steps to adapt a bathroom to make it safer for caretakers to bathe Ms. M, who was incapable of doing so unassisted. During Ms. M’s hospitalization, neither of the Appellants visited her in the hospital or sought to assist her in any manner.

   Dr. Gaddy had Ms. M examined and evaluated by Dr. James E. Carnes, a neurologist, in December 1996. After examining Ms. M, Dr. Carnes found that she suffered from dementia and confirmed she was unable to handle her affairs.

   As Ms. M’s Alzheimer’s disease progressed and her faculties deteriorated, Dr. Gaddy managed her financial affairs, oversaw maintenance of her properties, and ensured that she received constant care including food, clothing, bathing, and housekeeping. * * * Ms. M’s long-standing distant relationship with some members of her family, including Appellants, changed in March of 1999.

   On March 12, 1999, Appellants visited Ms. M, and with the help of disgruntled caretaker Lil Heller, took her to an appointment with Columbia attorney Douglas N. Truslow to ‘‘get rid of Dr. Gaddy.’’ On the drive to Truslow’s office, Heller had to remind Ms. M several times of their destination and purpose. At Truslow’s office, Ms. M signed a document revoking the 1988 Will and the 1988 durable power of attorney. She also signed a new durable power of attorney (1999 durable power of attorney) naming Appellants as her attorneys-in-fact. Appellants failed to disclose Ms. M’s dementia to Truslow. David Byrd, a witness to the execution of the March 12 documents, was likewise not informed of Ms. M’s dementia.

   Armed with the revocation of the 1988 power of attorney and recently executed power of attorney in their favor, Appellants prohibited Dr. Gaddy from contacting Ms. M. Dr. Gaddy was even threatened with arrest if he tried to visit Ms. M.

   On March 15, 1999, three days after Ms. M purportedly revoked the 1988 documents and executed the 1999 durable power of attorney, Dr. Gaddy initiated the present action as her attorney-in-fact pursuant to the 1988 durable power of attorney. He alleged, among other things, that the purported revocation of the 1988 durable power of attorney and the execution of the 1999 durable power of attorney were invalid because ‘‘on March 12, 1999, the date on which Ms. M purportedly signed the 1999 power of attorney and the revocation, she was not mentally competent’’ due to ‘‘senile dementia of the Alzheimer’s type.’’ The action sought declaratory judgment to render the 1999 durable power of attorney invalid and declare the 1988 durable power of attorney valid.

***

   Medical testimony was presented from five physicians who had examined Ms. M. * * * [They concluded that Ms. M. (1) was ‘‘unable to handle her financial affairs’’ and ‘‘would need help managing her daily activities,’’ and (2) would not ‘‘ever have moments of lucidity’’ to ‘‘understand legal documents.’’]

   The trial court concluded that Ms. M lacked contractual * * * capacity ‘‘from March 12, 1999 and continuously thereafter.’’ As a result, he invalidated the 1999 revocation of the 1988 durable power of attorney and * * * the 1999 durable power of attorney, and declared valid the 1988 durable power of attorney. Finally, he awarded Dr. Gaddy litigation expenses to be paid from Ms. M’s assets.

   Since 1986, the South Carolina Legislature has expressly authorized and sanctioned the use and efficacy of durable powers of attorneys. * * * 

   Upon the execution of a durable power of attorney, the attorney-in-fact retains authority to act on the principal’s behalf notwithstanding the subsequent physical disability or mental incompetence of the principal. To honor this unmistakable legislative intent, it is incumbent on courts to uphold a durable power of attorney unless the principal retains contractual capacity to revoke the then existing durable power of attorney or to execute a new power of attorney. Otherwise, the very purpose of [the statute] would be undermined.

***

   ‘‘In order to execute or revoke a valid power of attorney, the principal must possess contractual capacity.’’ [Citation.] Contractual capacity is generally defined as a person’s ability to understand in a meaningful way, at the time the contract is executed, the nature, scope and effect of the contract. [Citation.] Where, as here, the mental condition of the principal is of a chronic nature, evidence of the principal’s prior or subsequent condition is admissible as bearing upon his or her condition at the time the contract is executed. [Citation.] * * * 

   Here, the credible medical * * * testimony presented compellingly indicates that Ms. M suffered from at least moderate to severe dementia caused by Alzheimer’s Disease, a chronic and permanent organic disease, on March 12, 1999. We are firmly persuaded that Ms. M’s dementia, chronic and progressive in nature, clearly rendered her incapable of possessing contractual capacity to revoke the 1988 durable power of attorney or execute the 1999 power of attorney. We find this conclusion inescapable based on the record before us.

***

   The very idea of a durable power of attorney is to protect the principal should he or she become incapacitated. This case is precisely the type of situation for which the durable power of attorney is intended. On March 12, 1999, Ms. M, due to her chronic and severe dementia, lacked capacity to revoke the 1988 durable power of attorney and execute the 1999 power of attorney, and the evidence in this regard is overwhelming. In so holding, we return to Dr. Gaddy his fiduciary obligations to Ms. M, which he faithfully discharged prior to Appel-ants’ regrettable involvement. The decision of the trial court is

   AFFIRMED IN PART AND VACATED IN PART.