A Power of Attorney is a common legal document used in estate planning. There are several different types of Powers of Attorney that can be used, and choosing the right one is essential for achieving your goals. This blog post identifies the various different types of Powers of Attorney documents and when they should be used.
Non-Durable Power of Attorney
A non-durable Power of Attorney is set up to remain in effect only for either a set period of time or until a specific event takes place. For example, you can grant someone authority to act on your behalf to complete a specific business transaction for you. After that transaction is completed, the Power of Attorney will automatically expire.
Durable Power of Attorney
A durable Power of Attorney is set up to continue indefinitely. In many cases, this type will only take effect upon some type of event such as the incapacitation of the principal. It will remain in effect until the death of the principal, or until they regain the ability to make decisions on their own.
Springing Power of Attorney
A springing Power of Attorney can be used with the other types as it describes the event that causes the document to become active. If a Power of Attorney is not springing, it will take effect immediately upon signature. If it is springing, it will only become active once an event, such as incapacitation, occurs.
Medical Power of Attorney
A medical Power of Attorney is one of the most common types. It is established to allow someone to make medical decisions on your behalf should you be unable. Naming someone who you trust to make decisions that you would approve of is much safer and all-encompassing than using an advanced directive or other document that only applies to specific situations.
Financial Power of Attorney
A financial Power of Attorney is similar to the medical version except it applies only to financial decisions. The person who is given this type of Power of Attorney will be responsible for managing the principal’s financial assets while they are unable. This would include making investment decisions, paying bills, filing taxes, and more. This option can be set to begin in the event that the principal is determined to be unable to manage their finances on their own.
If you have any questions or concerns about Powers of Attorney, or you would like to add one of these documents to your estate plan, we are here for you. Please contact us to schedule a free consultation and get the help you need.