5 Different Types of Power of Attorney
The right power of attorney (POA) documents can play an essential role in your estate planning.
There are five different types of power of attorney. You should make sure that you consider each carefully to decide which works best for you.
But what is the power of attorney and what are the different types?
In this article, we’ll explore the five different types of power of attorney.
What Is Power of Attorney?
Power of attorney is a document that is used to appoint an agent to manage your affairs. There can be several reasons for needing a POA all of which will center around the fact that you are unable to effectively deal with your affairs yourself.
The person that you appoint to look after your affairs is known as a principle.
What Are the Different Types of Power of Attorney?
There are five different types of power of attorney. These are:
- Durable Power of Attorney
- Medical Power of Attorney
- General Power of Attorney
- Limited Power of Attorney
- Springing Power of Attorney
It is essential that you select the correct type of power of attorney for your needs.
- Durable Power of Attorney
A durable POA is effective straight after you sign it and allows your agent to act on your behalf if and when you ever become incapacitated. For instance, you may fall into a coma. In this case, your agent will be able to make decisions about your health and finances and sign documents on your behalf.
This type of POA lasts until you die, however, you can rescind the POA as long as you are competent.
- Medical Power of Attorney
A medical power of attorney appoints an agent to act on your behalf when making medical decisions when you cannot make them for yourself.
Your medical power of attorney will also ensure that your healthcare providers meet your wishes with regards to any Do Not Resuscitate instructions.
This type of POA becomes effective once you sign it, but can only be used if you have been deemed to be mentally incapacitated by physicians.
- General Power of Attorney
A general power of attorney gives your agent wide-ranging powers to act on your behalf. These might include managing bank accounts, paying bills, or buying and selling property. You may use this as a power of attorney for older parent.
- Limited Power of Attorney
In contrast to a general power of attorney, a limited POA allows the agent to only carry out specific duties such as cashing checks on your behalf.
This type of POA expires on completion of the specific task. You can have several different limited POAs with several different agents completing different tasks.
- Springing Power of Attorney
A springing POA comes into effect when a certain event happens such as medical incapacitation or military personnel deployed overseas. This type of POA ends at a specified time or when you become incapacitated or die.
Choosing the Right POA
Now that you understand the different types of power of attorney you can make the right choice for your estate. Knowing the difference will help you to make the right decision.
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