What is a Power of Attorney?
A power of attorney is a legal document that appoints an agent (also known as an attorney-in-fact) to act on your behalf in the case that you (the principal) are unable to manage your own affairs. This can be for a variety of reasons including travel overseas, illness, or a loss of mental capacity. Depending on the type of power of attorney you choose, your agent may be able to make a variety financial and health care decisions for you.
What are the Different Types of Powers of Attorney?
General Power of Attorney
A general power of attorney allows your agent to act on your behalf in a number of circumstances, handling matters including settlement of claims, business operations, overseeing business transactions, and buying life insurance. If you are going to be out of the country and need someone to manage your affairs in your absence, a general power of attorney is an effective way to get things done while you are away. Many individuals also choose to include a general power of attorney in estate plans to ensure an agent is in place to handle financial issues once they are no longer able to do so.
Special Power of Attorney
Under certain circumstances, some individuals may wish to sign a special power of attorney, which specifies specific powers that your agent is able to exercise on your behalf when you are unable to do so. Some of the special powers commonly specified include debt collection, real estate management, and selling of real estate and personal property.
Medical Power of Attorney
A medical power of attorney, also known as a “durable power of attorney for health care,” specifies the person that you want to make health care related decisions for you if you are no longer able to do so. The agent appointed can only act in accordance with your wishes regarding medical care that you want and do not want to receive.
Financial Power of Attorney
A financial power of attorney appoints an agent to handle your financial affairs on your behalf. Depending on the specifics dictated in the document, financial powers of attorney can be for one-time instances, like carrying out a real estate transaction while you are overseas, or comprehensive in the case that you are no longer able to manage your own financial transactions. A comprehensive financial power of attorney, known as a “durable power of attorney for finances,” allows your agent to handle a variety of financial matters if you are incapacitated, including managing your retirement accounts and filing your taxes.
What is Durable Power of Attorney?
Many power of attorney agreements only allow the designated agent to act on your behalf if you are in a good mental state. These agreements are automatically terminated once you become mentally incapacitated or unable to handle your own affairs. If you wish for your agent to continue to act on your behalf, even if you are incapacitated, it is important to sign a durable power attorney, which remains in effect and allows your agent to act on your behalf even when you are unable to do so any longer.
Whether you need a general power of attorney or a durable power of attorney, it can be overwhelming to make these decisions on your own, as there are many factors to take into consideration. If you are in need of assistance gaining powers of attorney or creating a power of attorney, contact our experienced team today.