A power of attorney is a legal document used to appoint someone that is physically and mentally eligible to manage your financial and legal affairs on your behalf in conditions where it becomes impossible for you to act for yourself. The person who acts on your (principal’s) behalf is called an agent.
There are different types of power of attorneys that grant a variety of authorities in a variety of situations to your agent. That is why it is necessary for you to ensure that you make the right type of power of attorney that meets your and the state’s needs. Power of attorney requirements by states can vary according to your needs, but mostly they all required important credentials for principals and agents.
5 different types of power of attorney
A power of attorney can be durable, general, or limited. Other certain types of attorney include springing power of attorney and healthcare power of attorney. The purpose behind making different types is to provide the specified protection to the principal and ensure agent(s) to remain available in case of an emergency.
A durable power of attorney
A DPOA (durable power of attorney) becomes effective right after you made your power of attorney and your agent signs it. It allows your agent to take control of your decisions and act on your behalf immediately when you become debilitated. For example, if you get paralyzed and unable to perform certain tasks, then your agent will take your financial and healthcare decisions for you. Every state allows DPOA to become effective after such a situation occurs.
A non-durable power of attorney
A non-durable power of attorney becomes ineffective or expires when you die or become debilitating. For example, if you die while you are paralyzed then the agent will no longer be able to make decisions on your behalf. The state court will then appoint a guardian that would look after your affairs.
Medical Power of Attorney
Also called advance directives, medical power of attorney allows you to get yourself a healthcare agent. That means to appoint someone that makes healthcare decisions for you when you can’t make them for yourself. Not only healthcare decisions, but your agent will also likely have authority over your organ donation, surgical procedures, and medical treatments. Moreover, the agent can make certain healthcare choices like selecting healthcare facilities, giving you artificial nutrition, and authorising the release of your medical records.
Many states required you to sign your medical attorney in front of a legal notary because of its complexities. Your medical POA becomes effective after you sign, but it can only be used when the requirements are satisfied, like in conditions where you’re declared mentally unfit to make sound decisions.
A general power of attorney
A general power of attorney grants your agent a broader range of authorities such as making real estate decisions, resolving financial matters, and taking legal steps on your behalf – this includes:
- Purchasing and selling properties
- Entering contracts
- Looking after banking transactions
- Paying utility and other bills
The authority granted to an agent through a general power of attorney may differ according to the statute of limitation across states and restricts agents to take some actions. Who can actually override your assets actually depends on the POA and the state you reside in.
Limited power of attorney
Conversely, with the general POA, this type basically grants the agent an authority to act on behalf of the principal but only in particular conditions. For instance, your agent will be able to cash your checks for you, but won’t cast a check on your behalf.
Some states call it a special power of attorney that will expire at a certain time or the specific task mentioned in the state form completed. States allow several limited power of attorneys to be made for different situations to grant different powers to agents on the principal’s behalf.
Springing power of attorney
Also called conditional power of attorney in many states, it becomes effective when the event mentioned in the form comes into action – generally injury, physical incapability, or incapacitation. For instance, military personnel often draft conditional or springing power of attorney especially when they are expected to be deployed in another region for an unknown period of time. The power of attorney expires when the principal comes back or dies.
States allow principals to make adjustments in their power of attorney according to their needs – keeping every formality in mind that is legislated according to their states. Some of the common types of power of attorneys are explained above but you need to see your state’s statute of limitations for the same purpose.
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