what is power of attorney

What Is Power of Attorney?

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Power of attorney is a legal document that designates another person to act for you in the event that you are unable to act for yourself. There are several types of power of attorney, and each can be used for different purposes.

Are There Different Types of Power of Attorney?

Choosing someone to be your power of attorney can be intimidating but learning about the different types is helpful in understanding what legal rights you’re giving your agent. Power of attorney isn’t always as all-encompassing as it seems. Here are a few different types of power of attorney to consider.

The designation of a power of attorney becomes invalid if the person becomes incapacitated or dies.

General Power of Attorney

A general power of attorney authorizes another person or representative to act on your behalf for things like business transactions, buying life insurance, or hiring professional help. It’s a useful tool if you travel a lot and are responsible for a lot of financial affairs and business decisions, but it’s also used by people who are physically or mentally incapacitated and need help managing their affairs.

A general power of attorney gives a lot of power to your agent, but one has one major limitation. It only stays in effect until you become incapacitated or in the event of your death. When either of those things occurs, the person with power of attorney no longer has the legal authority to act on your behalf.

Durable Power of Attorney

This document appoints someone to execute key decisions about healthcare, finances and accounts, and legal matters on someone’s behalf, just like a power of attorney. Anyone can be appointed to this position, but it’s very important that it’s someone who you trust to act in your best interests.

The significant difference between the power of attorney and durable power of attorney is that a durable power of attorney stays in effect even if the person becomes incapacitated and unable to make their own decisions. It’s a long-term designation that ultimately gives the agent a lot of control which is why it’s so important to choose someone trustworthy for this type of power.

Special Power of Attorney or Limited Power of Attorney

A special power of attorney or limited power of attorney is a much narrower legal designation that authorizes an agent to work on your behalf but only in clearly defined circumstances. For example, a financial advisor may be authorized to buy and sell stocks, or an accountant might be authorized to file your taxes but neither has the authority to access nor withdraw from your bank accounts.

Designating a special power of attorney is helpful in certain situations, but it’s important to remember that their role is limited. You may need to designate more than one to make sure everything is taken care of in the event that you’re unable to make your own decisions.

Another way that you can have a limited power of attorney is by designating springing powers. This means that a power of attorney only takes effect if predetermined triggering events occur. It’s most commonly used as a part of a will or a trust to designate someone to manage your affairs but only when you are unable to do so yourself.

Healthcare Power of Attorney

A healthcare power of attorney is a special power of attorney that only authorizes someone to make medical decisions about your healthcare and medical treatment. It takes effect if you are unable to make decisions or communicate decisions concerning the treatment you want and don’t want.

Your healthcare power of attorney can prevent unwanted treatments or make sure your ethical beliefs are respected with regard to care. Denoting a healthcare power of attorney is an easy process and can be revoked easily by simply filling out additional paperwork and destroying old forms.

How to Get Power of Attorney

If you’re the primary caretaker of an aging parent, friend, or loved one, it’s important to discuss the power of attorney when they are alert and awake enough to make a clear-headed decision. This can be a difficult decision to have, but it’s better to have the proper legal protections in place before something happens.

The first thing you and your loved one should determine is what kind of power of attorney is best. Then contact a lawyer in your area to find out what the proper procedure is in your state. There is usually a lot of paperwork involved and which is why it’s important to make these decisions when your loved one can still read, understand, and sign documents.

Obtaining the power of attorney if the person is incapacitated is possible, but it’s a lot more difficult. You may need to obtain a sworn affidavit from the doctor for proof of the current condition.

Review all forms with your lawyer to make sure the language suits your particular case and that the documents are legal and binding.

How to Revoke Power of Attorney

Revoking power of attorney isn’t too difficult, but because it’s a legally binding document, there are specific steps that need to be taken. A request to revoke power of attorney must be made in writing. Verbal revocations aren’t always enough.

One way to revoke a power of attorney is to put a new one in place. Check with your lawyer, but usually, a new power of attorney document contains legal language that revokes any existing ones. If not, an official revocation must be made in writing that acknowledges the existing agreement and officially withdraws the powers granted in it.

After the paperwork is completed, the revocation has to be provided to the person currently acting as a power of attorney. You may also need to have an official document on file with a local or state recorder’s office to make it official. You should also inform institutions like your bank that that person is no longer authorized to make decisions for you.

This process is usually not a problem provided the person holding a power of attorney is willing to accept it. If not, the process could get complicated, particularly if the person feels you’re not thinking clearly or that someone else is trying to assume the role with bad intentions.

Ultimately, your power of attorney should be someone that you know you can trust now and in the future. If they truly have your best interests at heart, revoking the privilege should not be an issue.

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