Types of Power of Attorney
We want to share some info on power of attorney (POA) documents with you. POA is a legal document that allows an individual (referred to as the principal) to give someone else (an agent or attorney-in-fact) the authority to handle their affairs.
There are several different types of POA, distinguished by the amount of power granted to an agent and the circumstances under which they can exercise it. I’ll give you an overview of the main ones.
To start, there are POAs categorized by when they become active and for how long:
- Durable POA: A durable POA becomes active as soon as it’s signed and continues in perpetuity unless the principal cancels it or passes away. In the event that the principal is incapacitated and unable to make decisions, the agent still has the authority to make decisions on their behalf.
- Non-Durable POA: This document goes into effect immediately as well, but unlike a durable POA, it ends if the principal becomes incapacitated or unable to make sound decisions.
- Springing POA: A springing POA goes into effect only under certain conditions, not immediately when signed. Generally, this is when a medical professional determines that the principal is incapacitated or is not of sound mind.
POAs can also be categorized by the amount of power granted to an agent:
- General POA: This type of POA gives an agent a broad range of authority when it comes to handling affairs, including those related to finances, investments, business decisions, property, taxes, legal documents, and more.
- Limited POA: A limited POA grants an agent a much more narrow, specific set of powers that are outlined in the legal document. For example, someone may want someone to handle certain business operations or property management for them, but nothing more. The agent is limited to the conditions of the POA.
Finally, there are POAs that grant a specialized focus of powers to an agent:
- Medical POA: Also referred to as a healthcare POA, an agent is allowed to make medical decisions on the principal’s behalf. This is important in the event the person becomes incapacitated, experiences severe illness or injury, becomes disabled, or other serious health-related situations that impairs their ability to make decisions.
- Financial POA: Under this POA, an agent is authorized to manage an individual’s finances. It can be used in situations when a principal simply wants someone else to handle their affairs when they’re not present or when they are unable to due to a mental or physical condition.
When done properly, POAs can ensure that your affairs are handled the way you want in the event of extenuating circumstances or when you’re unavailable.
If you have questions or believe you and your family may need a power of attorney or other estate planning documents, reach out to us. All of our contact information is at RavosaLawOffices.com, or call us today for a consult at 413-734-4147.