Understanding the types of Power of Attorney and the role each one serves can be quite confusing at times. A power of attorney is a legal document that allows you to appoint another person to control your affairs should you become unable to do so effectively. These documents are critical to incapacity planning and avoidance of guardianship.
There are five different types of Powers of Attorney:
Non-Durable Power of Attorney
The non-durable power of attorney is used only for a set time frame and usually for a particular transaction in which you grant your agent authority to act on your behalf. Once this transaction has been completed, or should the principal become incapacitated during this time, the non-durable power of attorney ceases.
Durable Power of Attorney
A durable power of attorney allows an agent to manage all the affairs of the principal should it become necessary to act on the principal’s behalf. There is no set time frame like with a non-durable power of attorney. A durable power of attorney is effective immediately upon signing and expires upon the principal’s death.
Limited Power of Attorney
(sometimes called Special Power of Attorney)
This type of power of attorney is on a limited basis for a one-time financial or banking transactions or the sale of a property. Commonly this is used when the principal cannot complete the transaction due to prior commitments or illness and wants the agent to act on their behalf. This type of power of attorney has no other authority to act on behalf of the principal other than what is granted to them in the limited power of attorney terms.
Medical Power of Attorney
The medical power of attorney grants authority to the agent to make the principal’s healthcare decisions should they become incapacitated or unable to communicate. This power of attorney usually takes effect upon the presiding physician’s consent and allows the agent to authorize all medical decisions related to the principal.
Springing Power of Attorney
(sometimes called Conditional Power of Attorney)
This type of power of attorney is effective at a future time and only when a specific event occurs, such as a triggering event that occurs while the principal is out of the country or otherwise disabled/incapacitated at the time. This type can also be durable or non-durable.
In short, a financial power of attorney authorizes an individual to make financial decisions, and a medical power of attorney allows for someone to make medical decisions. These are two separate documents; however, the agent can be the same for both.
If you have further questions about Power of Attorneys or need to set one up for yourself, please contact us to schedule your consultation with Kimberly Loveland today.