Power of Attorney Basics
It is hard to imagine that the day will come when one of your loved ones will be unable to make decisions for himself/herself due to some unfavorable conditions. And what if you are the one to take care of all their needs: starting from day-to-day activities to managing their finances. A power of attorney is a legal document that will enable you to make important decisions on behalf of your loved ones. Simply put, a power of attorney will provide you with guidance on the decision-making and comfort enhancing process for the people you most care for.
A power of attorney allows a person to appoint another trustworthy person to manage his/her affairs in the event he/she becomes unable to do so, due to a health issue, injury, or any other form of unfortunate circumstance. The person appointed is called an agent or an attorney-in-fact. And the person who appoints is referred to as a principal. The scope of POA can cover all the key legal matters or can be limited to an authorization over a single action. These powers can only be granted when the principal has legal capacity.
A power of attorney allows the agent to make the following types of decisions:
- Make health care and medical treatment decisions (note that your loved one can also make a separate “health care power of attorney” giving only this power to another person).
- Make financial decisions (including gifts of money).
- Make decisions on what type of care one receives or what activities he/she participates in.
- Make decisions on what one dresses or what one eats.
Different Types of Power of Attorney
There are 5 main types of power of attorney, and the one an individual chooses to employ basically depends on the current situation. To determine which is the most appropriate for the given situation, one should first understand each of them.
General power of attorney: The agent is authorized to perform almost any action on behalf of the principal during the period when he/she is unable to do so. For example, the agent can manage financial accounts of the principal while he/she is out of the country or has temporary physical or mental health problems. A general POA ceases to be valid as soon as the principal becomes incapacitated, dies, or revokes the power of attorney.
Limited power of attorney: As the name indicates, the type of power of attorney is limited to specific areas or one-time acts, such as one-time banking transactions or sale of a certain property. As the POA is limited to particular acts, stated in the document, thus it is crucial to be very clear and precise about the powers granting the agent. The agent has no power to act on behalf of the principal other than what is granted to him/her in the limited power of attorney.
Durable/Non-durable power of attorney: These two types are considered as the most widely practiced ones. A durable power of attorney grants the agent with full control of the principal’s decisions, once he/she is unable to make them. It comes into force immediately after the incapacitation of the principal and ceases upon the principal’s death. On the contrary, a non-durable POA is established for a certain period of time. For instance, when the principal cannot attend a meeting to sign a document or make dealings and needs someone with legal authority to act on his/her behalf. It takes effect as soon as the document is signed and terminates when the principal is declared mentally incompetent or dies. It may also be revoked upon the request of the principal.
Medical power of attorney: This POA endows the agent with legal authority to make medical decisions on the patient’s behalf, provided that he/she lacks the ability to communicate and make decisions relating to his/her treatment. The agent receives this authority if it is determined by the doctor, in case the principal is incapacitated to talk or is in a coma.
Springing power of attorney: It is normal that one can feel uncomfortable granting other people with the power of attorney while he/she is healthy and sound. Springing power of attorney is a good option for similar situations. As such, this type of power of attorney only comes into effect upon specified future conditions. The principal is allowed to choose the future date and event that will bring it into effect. It is mandatory for the principal to clearly define the date or event in the document. By clearly defining the terms of when and in what conditions the springing POA goes into effect, the principal can prevent further confusion, stress, and family conflicts.
Granting power of attorney to someone can be really risky, as the person will potentially handle all your legal and financial affairs, as well as medical procedures. In addition to being a trustworthy person, the agent should also have some other characteristics. In the event you consider someone as your power of attorney agent but are not quite sure whether or not he/she will be eligible, it might be helpful to consult an experienced POA lawyer. Besides, choosing the most appropriate type of POA for your particular situation and drafting the legal document can be a real daunting task for a non-lawyer. The knowledgeable and experienced POA lawyers at the Margarian Law firm understand the requirements for granting power of attorney and will best advise you on the type and requirements of choosing the right POA for you.