“Power of attorney” is a legal term that just about everyone has heard, but not everyone fully understands. In this article, our team at Bennett Guthrie PLLC will provide a brief overview of what a power of attorney actually is and what it does so that you can understand why you should talk to your lawyer about creating one of these documents.
What is a Power of Attorney?
To put it simply, a power of attorney is a legal document that allows you to appoint a person to manage your property, your finances, or your medical affairs in the event that you become unable to do so yourself. The person you appoint to act on your behalf is called your attorney-in-fact, or your agent.
Types of Powers of Attorney
A power of attorney is not a one-size-fits-all document. In fact, there are multiple types of powers of attorney, which are suited for different situations. The basic types of powers of attorney are:
- General Power of Attorney – A general power of attorney document gives your appointed agent broad powers to act on your behalf. These powers include handling your finances and business transactions, buying life insurance, settling claims, and employing professional help.
- Special Power of Attorney – If you want to limit the powers your agent has, you can do so by signing a special power of attorney. For example, many people use special powers of attorney to limit their agents to managing real estate or business matters.
- Health Care Power of Attorney – As the name states, a health care power of attorney grants your agent the authority to make decisions concerning your medical care in the event that you are unable to make those decisions on your own.
- Durable Power of Attorney – Any general, special, or health care power of attorney can include what is known as a durability provision, which essentially keeps the current power of attorney in effect for the long term. You can also sign a durable power of attorney as a way to prepare for the possibility of becoming mentally incompetent due to injury or illness–you can specify that the document cannot go into effect until a doctor certifies that you are no longer capable of making your own decisions.