Types of POA and Which One Is Best For You
A lot of people have heard the term power of attorney thrown around in conversations, but aren’t quite sure how to define it. In its most general terms, power of attorney, or POA, is a legal document where you assign another person the power to make legal decisions for you. Normally, people will appoint a power of attorney when they’re unable to make effective or sound decisions on their own. Power of attorney can refer to both the person, sometimes referred to as the attorney-in-fact or the agent, and the actual document that designates the person obtaining power. What most people don’t know is that there are many different types of POA. Below we list the different ways in which you can appoint someone with power of attorney.
Different Types of POA
There are a few different circumstances that deem it necessary to legally assign someone power of attorney. Each circumstance will require different levels of power and legal aid. There are five main types of POA.
Non-Durable Power of Attorney
This form of POA is mostly used for temporary situations. Most people will turn to a non-durable power of attorney for a specific transaction. The sale of a home, transference of stocks, or any other special situation where something important is taking place, and the main stakeholder, or principle, is abroad or incapacitated for a short period of time. Normally, once the transaction is completed, the non-durable power of attorney dissolves. Out of all the different types of POA, it’s important to remember that this one is short-term.
Durable Power of Attorney
When most people think of POA, they think of the durable power of attorney. This is the most comprehensive and all-encompassing one out of all the different types of POA. A durable power of attorney will go into effect when the individual becomes unable to make decisions for themselves, usually due to an illness or old age, and will expire when they pass. Unlike a non-durable POA, durable power of attorney can last for an extended period of time and can involve many different decisions and transactions regarding the individual’s affairs.
Springing Power of Attorney
Out of all the different types of POA, the springing power of attorney can be a little tricky to compose and needs to be very carefully crafted. Basically, assigning a springing power of attorney means that an individual will gain POA after a specific event, circumstance, or date has occurred. For instance, if someone is having a serious surgery, they’ll assign a springing power of attorney to take control only during this timeframe. If something happens during the surgery, the agent can make decisions on their behalf regarding their affairs. This is normally an alternative to the durable power of attorney. It’s important for the document to be completed carefully and the dates and circumstances are clearly laid out in the contract.
Medical Power of Attorney
The medical power of attorney is exactly how it sounds. You’re primarily dealing with medical issues in these cases. While the other types of POA can involve decisions with a number of different transactions, medical power of attorney is there to make only medical decisions for an individual who is incapacitated or unable to make the decisions regarding their medical care on their own. This is a form of both a non-durable and springing POA.
Special or Limited Power of Attorney
A special or limited power of attorney can be used for very specific situations. Normally, this type of power of attorney is used for a particular transaction, like a transfer of a property or an asset. Special or limited power of attorney documents also need to be carefully crafted. The principle individual can set specific limitations and special instructions with this level of power. These types of POA will usually expire on a set date or upon completion of the transaction.
Setting up Power of Attorney
If you need to assign someone as a power of attorney, it’s important to choose someone that you trust. Usually, this person is a close family member, spouse, or friend who you’ve known for an extended period of time, normally your entire life. An attorney can help you decide what type of power of attorney you need according to your circumstances. Remember that giving someone too much or too little power in distinct moments can help or hurt you or your assets in the long run. It’s necessary to have the right document that’s designed for the right time with the right person. If you’re in need of a POA, speak with the legal experts who can help you decide what’s right for you. Call today to schedule time to consult with an attorney about POA.