What are the Different Types of Power of Attorney?

You will never know what to expect in the future, so it pays to prepare everything before the going gets tough. That includes planning how to and who will handle your finances, business, and other personal matters should you become unable to do so. This is where the power of attorney comes in. It is a document that allows a person to grant legal authority to another person to make decisions regarding finances, business, medications, health care, and other personal affairs on his or her behalf.

In general, a principal can choose from four types of powers that he or she can give to his or her agent (also called the attorney-in-fact).

The right type to choose depends on the extent of power you want to bestow on your agent. It also depends on when you prefer to start appointing such power to your agent as well as when you want the power terminated. 

1. General - This legal document allows the attorney-in-fact to act for the principal in almost every aspect of his or her life. It even authorizes the agent to gain access to the principal’s safety deposit boxes or to handle all the properties of the principal.

The effectivity of this document ends when the principal dies or becomes mentally disabled. Because of its seemingly unlimited nature, the general power must be considered thoroughly before it is given to another person. It is advised that this type of power be used sparingly because it is prone to abuse and misuse of power by the agent. 

2. Limited - This document, in contrast to the general type, authorizes the agent to make decisions for the principal on particular affairs for a limited time. That means the authority ends at the period indicated on the document. Just like the previous legal document type, it also ends at the death, mental illness, or disability of the principal. 

3. Durable - It grants the agent the right to act on the principal’s behalf even after he or she has become mentally incapacitated. Thus, the agent can make crucial decisions for you when you are unable to do so. The document takes effect right after the principal and attorney-in-fact have signed it, and it ends when the principal dies.  

4. Springing - This legal document is created in such a way that it takes effect only after the principal has become mentally disabled. When writing the document, one has to make sure that it clearly explains how to determine the occurrence of the springing event. 

You may also consider using separate powers of attorney to designate another person who will be responsible for your health care and finances. For example, a financial power of attorney allows the agent to perform certain tasks such as handling your properties or paying your bills when you cannot do it, such as when you are out of the country or hospitalized for a brief period.

The legal documents for each authority to be granted must indicate the terms that the agent must follow to act out your needs and wishes.  

An Insight On The Different Types Of Power Of Attorney

There are different types of power of attorney. These are meant to ensure that the needs of the principal is properly addressed and provided for. When preparing or creating a power of attorney, it is important to get lawyer assistance.

They would be able to help you identify what type of power of attorney would be best suitable for your needs.

• General power of attorney

The general power of attorney provides the attorney-in-fact (or agent) authority in all situations unless specified by the document. General power of attorney would include accessing safe deposit boxes, setting up trusts, transferring assets to trust funds, filing tax returns, entering contracts, representing the principal (signor of the document) and buying and selling property.

This type of power of attorney would be valid unless specified by the document, the principal dies or revokes the document, or the document specifies that it would end upon the event when the principal gets incapacitated or disabled.

• Specific power of attorney

If the attorney-in-fact is only granted authority over specific transactions like collecting debts, buying and selling property, then it is referred to as the specific power of attorney. The attorney-in-fact would only perform duties specified in the document until the principal revokes the document. Aside from revoking, both general and specific power of attorney is discontinued upon the principal’s incapacity and death.

• Non-durable power of attorney

The clear characteristic of the non-durable power of attorney is that it is for short-term transactions only. In a situation when the principal could not handle a transaction, then this type may be more suitable. Usually, this kind of power of attorney has an expiration. When the principal becomes incapacitated or is no longer able to provide authority for the continuation of the power of attorney, the document is no longer valid.

• Durable power of attorney

Unlike the non-durable type, the durable power of attorney can continue even after the principal becomes incapacitated or becomes incompetent in making decisions. The durable power of attorney can be terminated if the principal would terminate it or in the event of the principal’s death.

Durable power of attorney could cover health and care decisions, like discontinuing life support or surgery. It could also include financial matters unless specified by the document and the principal.

• Springing power of attorney

The springing power of attorney would “spring” in a specific event which is specified by the power of attorney. It could be an event of disability, illness or travel abroad. it would only be valid, if there are doctor or doctors which identified that the principal is indeed incapacitated.

However, it may pose some problems since mentally incapacitated is defined subjectively and difficult to determine. So it is not recommended that durable power of attorney would be “springing.”

• Health care power of attorney

This power of attorney is specified for only health care issues and is commonly used by principals who are suffering from terminal or mental illnesses. This kind of power of attorney is only contained in medical scope and could not be used for other duties.