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Biddle Law Estate Planning Blog

Sunday, April 2, 2017

A Brief Guide to Powers of Attorney

There are several types of powers of attorney. A power of attorney is a legal document that permits another person to deal with your personal affairs on your behalf. They are often used in the event that you become incapacitated or unable to deal with your own financial, health, real estate, or other important issues. They can also be used in situations where you may not have the experience or knowledge necessary to deal with an issue, but a loved one can help you with the problem.

What is a Power of Attorney?

The person that you appoint as your power of attorney can act as if he or she has control or authority over the particular matter for which you provide authorization. For example, you can appoint another person to sell or buy real estate on your behalf. Depending on how the power of attorney is designed, he or she may or may not be able to do other similar transactions.

Durable and Non-Durable Powers of Attorney

Generally speaking, there are two overarching types of powers of attorney: durable and non-durable. A durable power of attorney is used when the principal (the person who created a power of attorney) is unable to exercise their own authority, usually due to incapacitation. Their agent manages their affairs for them should this need arise.

A nondurable power of attorney is not effective if the principal becomes incapacitated. Usually, these types of arrangements are used only for a given period of time or a particular transaction. While they are useful for specific needs, a durable power of attorney is often much more beneficial for estate planning purposes.

Nondurable powers of attorney are also used in conjunction with a special or limited power of attorney. This type of authorization is only for a particular purpose or as to a definite piece of real estate.

Medical Power of Attorney

A medical power of attorney allows another individual to make decisions on your behalf that affect your health and well-being. These are often only effective when the principal becomes incapacitated. Often, this type of power of attorney will only take effect if the physician treating you determines that you cannot make your own decisions and someone else should act on your behalf. Usually, this instrument is used only in severe injury cases.

The particular person that you designate for this type of power of attorney will be able to make healthcare decisions that can have a severe impact on your future. For example, the agent will be able to determine when “pulling the plug” is appropriate if you are in a vegetative state.

Springing Power of Attorney

A springing power of attorney only becomes active if and when you become incapacitated and cannot handle your own affairs. This type of document is helpful as an estate planning tool if you become incapacitated but still need to set up valuable estate planning documents or handle other personal affairs.

Financial Power of Attorney

You can also create a power of attorney that only has powers over your financial decisions. You can explicitly designate which decisions are appropriate for a power of attorney, or you can include all decisions that involve finances.

Sometimes it is difficult to determine the type of power of attorney that you need. However, an experienced estate planning attorney will be able to help you draft the document that fits your needs. Contact Biddle Law at 650-560-7655 for more information.

 


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