What Is a Power of Attorney?
Peace of mind for you and your loved ones
on May 26, 2022
A power of attorney (POA) is a legal document that can create invaluable peace of mind for you and your family during difficult times. These estate planning tools create a legal relationship between you (the principal) and an agent (the attorney-in-fact) who will act on your behalf. Depending on your needs and decisions, your power of attorney document will grant an agent authority over essential affairs such as your real property, financial matters, and medical decisions.
There are multiple types of power of attorney, which are covered in detail below. This area of law can be confusing if you’re starting out. As always, the best course of action is to seek the legal advice of an attorney before drafting your power of attorney form.
Types of Powers of Attorney
Before speaking with a lawyer about power of attorney, it will be helpful to understand that there are different powers of attorney available depending on one’s needs and wishes. Here are some of the more common types or included provisions:
General Power of Attorney
Under a general power of attorney, the agent is granted broad powers over matters involving the principal. Here, the principal authorizes the agent to accomplish any number of tasks, which can include duties such as:
- Making business decisions
- Handling your personal financial decisions
- Purchasing insurance
- Settling legal affairs
- Handling gifts
Limited Power of Attorney
This type of POA allows the attorney-in-fact to act on the principal’s behalf in a limited capacity. This could mean a few different things. First, it could be a time constraint. Suppose that the principal has a medical procedure with a long recovery time. In that case, the principal might create a POA for an attorney-in-fact to handle their bank accounts during their recovery.
A limited POA could also refer to the scope of the attorney-in-fact’s fiduciary duties. For example, the principal may only want this power of attorney for specific accounts or financial matters.
Durable Power of Attorney
A durable POA is a document that allows your attorney-in-fact to act on your behalf or continue acting on your behalf if you become incapacitated. Durable POAs include a provision in the document laying out the principal’s expectations for the attorney-in-fact if the principal is rendered incapacitated. Here are two common types of durable POAs:
Healthcare Power of Attorney
This medical power of attorney allows the agent to make critical medical decisions for the principal if the principal lacks the requisite mental capacity to make health care decisions for themself.
Financial Power of Attorney
This type of durable POA works just like a healthcare POA, but for financial matters. This POA lets the agent handle essential matters like paying bills, filing the principal’s taxes, and depositing checks into the principal’s bank accounts.
Questions for an Estate Planning Attorney
Many real estate attorneys provide initial free consultations to prospective clients. These meetings are a great resource for both attorney and client because it allows the attorney to hear the facts of the case while the client can determine if the attorney meets their needs.
The best way to decide whether an attorney is the right fit is by asking informed questions. Here are some good questions to ask during your initial conversations:
- Are beneficiaries eligible to be attorneys-in-fact?
- How does a doctor gauge incapacitation?
- Do I need a notary public to notarize my POA document?
- What does a fiduciary duty entail?
Finding the Right Attorney For Your Needs
It is essential to approach the right type of attorney—someone who can help you through your entire case. To do so, you can visit the Super Lawyers directory and use the search box to find a lawyer based on your legal issue or location.
To help you get started, you may want to consider looking for a lawyer who practices estate planning and probate.