4 Types of Power of Attorney

Estate Planning - February 23, 2022
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You’ve probably heard the term “power of attorney” (POA) many times over the years. The question is: do you need a POA? LegalShield is here to help break it down. Remember, if you have any POA-related questions, LegalShield lawyers are always available and waiting to help.

We all try to be prepared for anything and to be in a position to take care of our family and loved ones. But sometimes, things happen that make it impossible to manage our affairs or make important decisions. It’s in those situations that a POA can help.

Simply put, it’s a legal document that gives someone else the power to make decisions for you, as your agent. And in the case of medical power of attorney, your agent can even make important healthcare decisions on your behalf. POAs are powerful documents that can have a profound impact on your family, your money, and your health.

Here are the four different types of power of attorney: Limited; General; Durable; and Springing.

1. The limited power of attorney

As the name implies, these POAs are for when you need someone to do things for you for a limited purpose. For that reason, these documents usually specify a date and time period after which the POA ends.

For example, an author might use a limited POA so that their book agent could cash checks made payable to the writer during a specified time. That way, the agent could take their commissions out of the author’s check and write a new check to the writer.

Or let’s say you had plans to go on a vacation on the same day that the deed for your new house needs to be signed. You could assign a limited POA to someone else for that function that only lasted for one day.

2. The general power of attorney

Not surprisingly, a general POA is more comprehensive. This essentially assigns all of your powers and rights to someone else. A general POA can also be used when people don’t have the time, skills, or desire to handle financial matters. Unless you choose to revoke a general POA, it applies as long as you’re alive, or until you become incapacitated.

There are many uses for a general POA, like:

  • Collecting debts
  • Applying for government benefits
  • Managing financial and business matters
  • Buying, selling or making investments on your behalf
  • Filing lawsuits on your behalf

3. The durable power of attorney

The major difference between the general and durable POA is that the durable version lasts even if the assignor becomes incapacitated. In other words, you’d use a durable POA if you wanted to give your agent authority once you’re unable to act for yourself. Because of this, many consider a durable POA to be the most powerful type of power of attorney.

One example may be if you’ve been diagnosed with early-onset Alzheimer’s.

4. The springing power of attorney

This type of POA serves roughly the same purpose as a durable POA, but it only comes into effect once a specific event happens, such as when the assignor becomes incapacitated. With these types of POAs, it’s very important to clearly define what “incapacitated” means.

What’s the difference between a durable and non-durable power of attorney?

The main difference is that durable POAs can apply as soon as they’re signed and also when the assignor eventually becomes incapacitated. We should note that when the assignor passes away, any type of POA they assigned becomes void.

LegalShield can help

Picking the right POA is, obviously, important. It all depends on your preferences and your particular situation. It helps to start by creating an estate planning checklist. Once you’re ready to discuss a POA, LegalShield is here to help make sure that you get it right. Simply pick one of our affordable membership plans and you’ll have on-demand access to established lawyers specializing in estate planning.

Additional resource: Estate Planning Guide – Everything You Need to Know


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