Importance of Power of Attorney Documents
A power of attorney is a very important estate planning tool. Power of attorney (POA) is a legal document in which you give someone else the authority to act on your behalf and most states will accept powers of attorney created under another state's laws, especially when they meet the state's requirements where the POA is being enacted. At Joseph L. Motta Co., we specialize in estate planning and elder law from our law practice in Avon Lake, Ohio and prepare the appropriate legal documents to appoint power of attorneys for many clients and it's important to understand there are several different kinds of powers of attorney that can be used for different purposes. Before working with an attorney to execute this crucial document, it is important to understand what your options are.
Four Main Types of Power of Attorney:
A power of attorney allows a person you appoint -- your "attorney-in-fact" or agent -- to act in your place for financial or other purposes when and if you ever become incapacitated or if you can't act on your own behalf. The following are the four main types of powers of attorney we regularly prepare at our estate planning law firm:
What is Limited Power of Attorney?
A limited power of attorney gives someone else the power to act in your stead for a very limited purpose. For example, a limited power of attorney could give someone the right to sign a deed to property for you on a day when you are out of town. It usually ends at a time specified in the document.
What is General Power of Attorney?
A general power of attorney is comprehensive and gives your attorney-in-fact all the powers and rights that you have yourself. For example, a general power of attorney may give your attorney-in-fact the right to sign documents for you, pay your bills, and conduct financial transactions on your behalf. You could use a general power of attorney if you were not incapacitated, but still needed someone to help you with financial matters. A general power of attorney ends on your death or incapacitation unless you rescind it before then.
What is Durable Power of Attorney?
A durable power of attorney can be general or limited in scope, but it remains in effect after you become incapacitated. Without a durable power of attorney, if you become incapacitated, no one can represent you unless a court appoints a conservator or guardian. A durable power of attorney will remain in effect until your death unless you rescind it while you are not incapacitated.
What is Springing Power of Attorney?
Like a durable power of attorney, a springing power of attorney can allow your attorney-in-fact to act for you if you become incapacitated, but it does not become effective until you are incapacitated. If you are using a springing power of attorney, it is very important that the standard for determining incapacity and triggering the power of attorney be clearly laid out in the document itself.
Attorney-in-Fact: Power of Attorney (POA) Documents
An attorney-in-fact is the person who acts for the principal under the power of attorney document. Regardless of what type of POA you use, it is important to think carefully about who will be your attorney-in-fact. Your attorney-in-fact will have a lot of control over your finances, and it is crucial that you trust him or her completely. While many pre-packaged do-it-yourself POA documents and forms are available, it is a good idea to have an attorney draft the power of attorney documents specifically for you. There are many issues to consider and one size does not fit all. Contact Joseph Motta, estate planning and elder law attorney in Avon Lake to learn more.