Types of Powers of Attorney
There are a few different types of powers of attorney:
- Limited Power of Attorney
- General Power of Attorney
- Durable Power of Attorney
- Springing Power of Attorney
Limited Power of Attorney (POA)
Limited powers of attorney are used when you want a person to be able to act on your behalf for a specific purpose. Some examples include:
- The purchase or sale of a vehicle.
- For a limited duration, such as during the time you are in the hospital for scheduled surgery.
- Transacting on a specific account.
General powers of attorney allow the agent to make major decisions about your finances as long as they don’t conflict with your instructions. The person you appoint will have all of the same rights and powers to transact that you have. This includes signing legal documents, paying bills, initiating or defending lawsuits, and engaging in any other financial transaction.
A springing power of attorney is a document that appoints an individual to act as your agent in the event that you become unable to make decisions for yourself. Simply put, the power “springs” into action upon incapacity.
This type of power of attorney can be useful if you want someone else to take over should you become incapacitated. It is useful if you do not wish to empower your appointed agent immediately, but would rather empower them at such future time after a predefined contingency has been satisfied (such as incapacity).
A durable power of attorney is a power of attorney that remains valid even if you become incapacitated. This allows an agent to continue making decisions for you.
A durable power of attorney can be springing or it can go into effect immediately upon execution.
If a power of attorney is not durable, the agent’s authority under the document will terminate upon your incapacity. Your family would have to petition the court for a conservatorship, post a bond, and be under to supervision of the court in order to manage your finances.
Which kind of power of attorney do you need?
Choosing the right kind of power of attorney for your unique situation is very important. Choosing the wrong power of attorney can be harmful. You could mistakenly empower someone else to act on your behalf at a time or in a situation that you never intended. If not properly designed, it can also fail to empower your agent at a time when it would be best that they actually be empowered.
If you have any questions or would like to create a power of attorney, contact Koza Law Group. We can be reached at (760) 487-8330