When an individual becomes incapable of making their decisions due to one or more personal reasons that might include poor health, some kind of injury or other unfortunate situations, one can put a power of attorney (POA) into place that can assist their loved ones in making difficult and necessary decisions and judgments on their behalf.
Individuals, who cannot take care of themselves, enhance their personal comfort or need guidance with decision-making processes can greatly benefit from this legal document known as the power of attorney. A power of attorney enables a principal, also referred to as a donor or a grantor to assign an agent (the agent is usually a person close to the individual in need) in order to manage all the necessary affairs.
There are five different types of this written authorization that allows the agent to act or represent on account of another person. In order to decide which type of power of attorney will be suitable for your personal circumstances, you need to study and understand each type first and the ways in which they have the ability to offer the best assistance possible. Here are the five different types of power of attorney explained:
Limited Power of Attorney
Also commonly known as special power of attorney, limited power of attorney provides the agent i.e. the person who authorized the power of attorney to manage the banking, investment and financial matters. The limited power of attorney is used most often for transactions that take place only once. This occurs when the donor isn’t able to carry out the transactions because of some sort of illness, incapacitation or other advance commitments. It is mandatory for the authority of the agent to exclusively remain within the grantor’s determined scope.Springing Power of Attorney
The springing power of attorney is usually an alternative to the durable power of attorney (explained later). There are some individuals who understandably are not comfortable about granting another person power of attorney and authorization to make their decisions when they are in good health condition. Therefore, a springing power of attorney is especially designed to come into effect if and only if a specified date comes, an event occurs or a condition is met.
Medical Power of Attorney
It is essential to understand the medical power of attorney as it comes handy in hospice settings. The medical power of attorney allows the principal to appoint an agent and provide them with legal authority in order to make health and medical decisions on behalf of the patient in need. This power of attorney is only valid when the person in need loses their ability to make decisions about the treatment in question and communicate on their own. After the presiding doctor gives their consent, the agent of the power of attorney takes on the responsibility of being an advocate for the patient.
Durable and Non-Durable Power of Attorney
The durable as well as the non-durable POA are considered to be two of the most common kinds of power of attorney among all other. With a durable POA, the agent gets complete control over the decisions of the individual who needs the POA if they lose the ability to make them at some point. This situation usually occurs when the individual in need becomes incapacitated or disabled. In such case a strong power of attorney is immediately put into effect. As soon as the principal of the POA dies, the power of attorney expires.
On the other hand, a non-durable POA is effective for a limited time period, usually for a single transaction. The transactions might include addressing some prime affair, managing the stock of the individual in need or selling their home in specific circumstances such as the individual in need being abroad. This type of POA only comes into effect after the person in need specifically submits a request for it. The non-durable power of attorney can be revoked upon the principal’s request, incapacitation or demise.
Bottom Line
Power of attorney is formed to protect those individuals who are incapable of protecting themselves. This allows the loved one they trust to be on their side at all times. Understanding the difference between all the five types of power of attorney will help make the process simpler during difficult times. If you are still finding the process of establishing a power of attorney difficult, it might be best to consult a professional estate planning lawyer who can guide you through the process!
