Power of Attorney: An Overview of the Different Types
A power of attorney is a document that could allow you to appoint an organization or single individual, also known as an attorney-in-fact or agent, the legal ability to administer your affairs if you become incapable of doing so. A power of attorney could be useful in any of the following circumstances:
- An individual who lives alone, has no close family, and is awaiting surgery
- An individual who is diagnosed with a debilitating disease
- An individual who is diagnosed with cancer
- A couple who will be taking a trip but are interested in selling their owned property while they are gone
- A single business owner who has no economic or medical concerns
All of these are simple and common examples of individuals who could benefit from a power of attorney. While the list is not extensive, it is important to recognize that if you have reason to believe that you could benefit from one, speak to an estate planning lawyer who can help you. An attorney with the right experience can assist you in figuring out if a power of attorney is right for you.
Different Types of Power of Attorney
If you need a power of attorney, it is important to recognize that there are different types of a power of attorney. Among their differences, each type of power of attorney could give the party you choose a different level of power. The following is a list of some of the most common forms of power of attorney.
General Power of Attorney
A general form of a power of attorney gives expansive powers to the individual or organization to act on your behalf. Some of the powers given to this party may include, but are not limited to:
- Handling of your financial transactions
- Handling of your business transactions
- Purchasing life insurance on your behalf
- Settling claims on your behalf
- Operating your business interests
- Making purchases or gifts
- Hiring professional support on your behalf
A general power of attorney could be really beneficial to an individual who plans to leave the country for a trip or knows that he or she will become mentally or physically incapable of managing certain aspects of their lives. A general power of attorney can give the selected agent the legal right to take care of those necessary affairs. Furthermore, a general power of attorney can often be included in an estate plan to give the agent the right to handle financial matters.
Special Power of Attorney
A special power of attorney is not broad like a general power of attorney is. In fact, by having a special power of attorney, the agent is typically only given a selected amount of powers. This type of power of attorney is most beneficial when it is needed for temporary reasons such as impeding commitments or certain health reasons.
Some of the most common reasons as to why you may need a special power of attorney include the following:
- To sell property
- To manage real estate properties
- To collect debts
- To manage business transactions
Health Care Power of Attorney
A health care power of attorney could be important to many people who have a loved one in the hospital. A health care power of attorney could give the agent the legal right to make medical decisions should you become medically and mentally incompetent, medically unconscious, or are otherwise unable to make standalone decisions.
Although a health care power of attorney should never be regarded the same as a living will, there are many states that could give you the opportunity to state your preferences in regard to being kept on life support. To see if you qualify for this option, speak to a qualified attorney who is knowledgeable of your state’s legislative actions toward powers of attorney.
Creating a Durable Power of Attorney
Unfortunately, life can carry many unforeseeable circumstances that could incapacitate someone and render them unable to make decisions. If you already have a power of attorney, making your power of attorney durable requires an extra step. This durable form of power of attorney can preserve your power of attorney if you become somehow incoherent or mentally incompetent.
Finding the Right Agent
Most people choose someone they really trust to become an agent for them. No matter who you choose, be they a relative or even an organization, it is recommended that you select someone who will have your best interests at heart. You should consider selecting an agent who can respect and is aware of your wishes as well as someone who will not abuse the power you have given him or her.
When giving someone a power of attorney, you should consider having him or her keep a detailed record of the transactions he or she is doing for you. In this case, the agent can periodically brief you on what is being done. You may also choose to have your selected agent give these updates to another trusted third party.
Talk to an Estate Planning Attorney
Drafting a power of attorney can be a complex and difficult matter. If you have reason to believe that you are in need of a power of attorney, you should consider speaking to an estate planning attorney who can guide you through the legal process. This is a complex process, and each person’s case is unique. Make sure you haven’t overlooked anything when granting someone power of attorney. The right attorney can give you peace of mind knowing that your power of attorney will not only be upheld, but will also be made for your best interests.