Everyone has heard of a Power of Attorney but what exactly is it and what does it do? Generally speaking, a Power of Attorney (POA) is a document that allows you to appoint a person or organization to act as your agent. This person or entity, known as an attorney-in-fact, has the authority to manage your affairs if you are unable to do so. There are actually various types of Power of Attorney that offer your appointed agent certain levels of control.
General Power of Attorney
A General Power of Attorney gives your appointed attorney-in-fact broad powers to act on your behalf. This may include making financial or business decisions, medical decisions, or legal choices. The General Power of Attorney is often used for individuals who are out of the country and need to appoint someone to handle their affairs during their absence. It is also used when someone is physically or mentally incapable of managing their own affairs.
Limited Power of Attorney
A Limited Power of Attorney, sometimes referred to as a Special Power of Attorney, specifies what authority the agent will have. The principal lists all the matters for which the agent will make decisions, sign documents or give instructions. It may be limited to one specific matter. Selling personal or real property, managing real estate, collecting debts, and handling business transactions are some of the common matters specified in a special power of attorney document. A Limited Power of Attorney is only effective while the principal is still alive and has full cognitive abilities. It may also specify a certain period of time for which it is valid.
Medical Power of Attorney
A Medical Power of Attorney grants your agent authority to make medical decisions for you if you are unconscious, mentally incompetent, or otherwise unable to make decisions on your own. An agent may consent, refuse to consent, or withdraw consent to medical treatment and may make decisions about withdrawing or withholding life-sustaining treatment.
Durable Power of Attorney
A Durable Power of Attorney is simply a general, limited, or medical POA that has a “durability provision” which keeps the current power of attorney in effect even if you become incapacitated and unable to make decisions for yourself. If a power of attorney document does not explicitly say that the power is durable, it ends if you become incapacitated.
Springing Power of Attorney
A Springing Power of Attorney is a special Durable POA that “springs” into action only if you become incapacitated or unable to handle your own affairs as opposed to a typical Durable Power of Attorney which becomes effective as soon as you sign the document, and continues to be effective if you are incapacitated.
How Long is Power of Attorney In Effect
General Power of Attorney is typically in effect until the death of the principal unless it has a specific expiration date, or the principal revokes it in writing, or an event occurs that terminates it under the law. General POAs are typically written with “durable” language, stating that even if the principal later becomes mentally incompetent, its powers remain in full force and effect.
A Limited Power of Attorney terminates when the specific action for which it is intended has been completed. It may also be for a limited time, such as when a person is out of the country, and would be given an expiration date, after which time its is no longer valid.
While legally, a POA may not expire, it is a good idea to have them reviewed and updated at least every 3 years. Since laws and personal circumstances change, many financial institutions will be hesitant to accept a document that is several years old.
If you have questions about Powers of Attorney, please give us a call at 817-330-9235 or visit The Davidson Law Group, our elder law attorney partners.
This website does not provide legal advice and is not a law firm. This article is provided for informational purposes only. Although we research to make sure our information is accurate and useful, we recommend you consult a lawyer if you need legal advice.