Navigating the intricacies of your financial legacy can be a daunting task. Understanding the nuances…
What are the Different Kinds of Powers of Attorney?
If I asked you what you thought is the most important document in your estate plan, you may say it’s your last will and testament or your trust. However, that’s not always the case. In many situations, the most important planning document may be a well-drafted power of attorney, says The Miami News-Record’s recent article entitled “Power of attorney options match different circumstances.”
When a person can’t make his or her own decisions because of health, injury, or other unfortunate circumstances, a power of attorney (POA) is essential. A POA is implemented to help their loved ones make important decisions on their behalf. It helps guide decision-making, enhances comfort and provides the best care for those who can’t ask for it themselves. A POA permits the named individual to manage their affairs.
To know which type of POA is appropriate for a given circumstance, you should know about each one and how they can offer help. There are five POA forms.
Durable and Non-Durable Power of Attorney. This is the most common. These leave a person with full control of another person’s decisions, if they’re unable to make them. A Durable POA continues to be in effect when you are incapacitated. That is what the “durable” part means. A Non-Durable POA is revoked, when you become incapacitated. Be sure you know which version you are signing.
Medical Power of Attorney. Especially in a hospice setting, it permits another person to make medical decisions on the patient’s behalf, if they lose the ability to communicate. This includes decisions about treatment. In this situation, the POA takes the role of patient advocate, typically with the presiding physician’s consent.
Springing Power of Attorney. This POA is frequently an alternative to an immediately effective POA, whether it durable or non-durable. Some people may not feel comfortable granting someone else POA, while they’re healthy. This POA takes effect only upon a specified event, condition, or date.
Limited Power of Attorney. This POA provides the agent with the authority to handle financial, investment and banking issues. It’s usually used for one-time transactions, when the principal is unable to complete them due to incapacitation, illness, or other commitments.
If you don’t have a POA, ask a qualified elder law or estate planning attorney to help you create one. If you already have a POA, review it to be sure it has everything needed, especially if you have a very old POA or one that was drafted in a state other than the one in which you reside.
Reference: The Miami (OK) News-Record (July 7, 2020) “Power of attorney options match different circumstances”
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