Often abbreviated “POA”, a power of attorney is a document used in estate planning to appoint a person or entity to manage your interests. This agent, by right of the POA has the legal authority to make decisions on your behalf regarding matters outlined in the document.
5 Types of Power of Attorney
TA Power of Attorney (POA) gives an appointed person, called an agent, the authority to act on your behalf. The scope and timing of that authority depend on the type of POA you choose.
Durable Power of Attorney
A durable power of attorney (DPOA) grants your agent the ability to act in your place if you become unable to. With a DPOA, if you were involved in an accident and unable to communicate, the designated agent would have the authority, based on this document, to make financial and health decisions for you as well as sign any necessary documents in your name. This POA becomes effective immediately when signed unless designated otherwise and is terminated on your death.
In contrast, a non-durable power of attorney becomes void if you are incapacitated or die. Most POAs can be made durable. Make sure you know from the start which category yours falls under. If your POA is non-durable and you were to fall into a coma, your appointed agent would lose the authority you have given, and the court would then appoint someone to make the decisions on your behalf.
Medical Power of Attorney
A Medical POA (also called an advance directive or healthcare surrogate) lets your agent make medical decisions if a doctor declares you incompetent. The agent can access your records, ensure Do Not Resuscitate or Living Will instructions are followed, and decide on treatments.
General Power of Attorney
A General POA gives broad authority. Your agent can pay bills, sign contracts, buy property, and make legal decisions. Soldiers often grant this to a spouse during deployment.
However, unless you make it durable, it ends if you become incapacitated or upon death. Rules can vary by state.
Limited (Special) Power of Attorney
A Limited POA grants authority for specific tasks, such as paying bills or cashing checks. It doesn’t give full control over your finances or contracts.
Once the task is complete or the POA expires, the authority ends. You can create multiple limited POAs for different agents and tasks.
Springing Power of Attorney
A Springing POA takes effect only if a specified event occurs, such as a medical diagnosis. It lasts for a set time and ends if you’re incapacitated or die.
How Do You Know Which Power of Attorneys is Right for You?
There is a wide range of POAs to consider. Consulting with an experienced estate planning attorney can prove a vital tool to properly organizing your estate needs. Give us a call, and we will walk you through the types of powers of attorney and help you select the right one(s) for your estate. Contact us today.
