Understanding the Different Types of Powers of Attorney

Different Types of Powers of Attorney

There are different types of powers of attorney. They are similar, yet different enough, that it is important to understand the difference.

These powers can be used in different situations - for the management of health care decisions, for the management of financial decisions, or for the management of real property. Though they allow you to take different actions, they share some common characteristics. The powers granted by these documents are often very broad, allowing the person the ability to make decisions on your behalf as if they were you.

What are General Powers of Attorney?

A General Power of Attorney is a formal document that allows you to appoint someone to act on your behalf, no matter the circumstances. It gives this person the power to handle your finances, property, and business affairs. If it is not durable it will not be effective if you become incapacitated.

What are Durable Powers of Attorney?

A durable power of attorney allows an individual to give someone else the authority to make personal decisions for them. It is called a "durable" power of attorney because it continues to function even if you have become incapacitated. This is in contrast to a non-durable general durable power of attorney which stops being effective if you are incapacitated.

What are Springing Powers of Attorney?

A power of attorney (for any type of action or decision) is said to be a "springing" power of attorney if it is the type of power of attorney that grants the person the ability to act on your behalf only if you become incapacitated. The person that is identified in the power of attorney cannot make any decision on your behalf unless you are unable to make those decisions for yourself. 

Springing Powers of Attorney are also known as "springing" powers because they “spring” into effect (become operational) when a triggering event occurs, such as a mental disability diagnosis. In this case, the document identifies what the triggering event will be before the person can make decisions for you.

What Does an Immediately Effective Power of Attorney do Differently? 

If a Power of Attorney is said to be "immediately effective" that means that the person being granted the power can take actions under that document without you being incapacitated, or without you meeting any pre-condition. Many Powers of Attorney have the ability to start as a springing power but then be activated with the signing of an authorization, allowing the protective nature of the springing power to be combined with the ability to plan for its use with a power that is immediately effective.

Who Can Benefit From a Durable Power of Attorney?

People often think that a power of attorney is only beneficial for the elderly -  their parents or grandparents, for example. In fact powers of attorney are beneficial for most of us. We never know when something may change and we may need the help of a trusted companion. Since these documents can only be prepared when we don't need them, it is something to take care of early. Without a power of attorney in place the only option left for our loved ones is to utilize the power of the courts to grant the ability to make decisions on our behalf. This is true for anyone - our children once they are 18, our partners, our parents. 

I can help you understand the different types of powers of attorney and help you to be prepared for the unexpected situations in life.  

What is Estate Planning?

What is Estate Planning?

Estate planning is the process of making decisions about
what happens to your property, including real estate, personal possessions and money, after you die. It is the process of thinking things through and sharing your decisions with the people who matter to you.

Estate planning helps you determine who will manage your assets, provide financial support for your dependents and how they (and you!) will be cared for. It also explains how a person's final wishes are followed in the event of incapacity and death.

The best estate planning is done after careful consideration, thinking through who matters to you, what you have, and how things are best handled. You can reach out for a complimentary consultation with me and we can explore how estate planning can help you meet your goals for your self and those you care about.