A power of attorney (POA) is a useful legal tool that allows someone else to make key decisions on your behalf. POAs are an essential part of estate planning.
Nonetheless, there are several different types of POA, with each serving specific purposes. It’s important to identify the correct estate planning tools for your unique circumstances.
Here are some key points to remember.
General POA
A general power of attorney is broad. It grants an agent the authority to act on your behalf in terms of finances, real estate and some legal decisions. Usually, this is a temporary measure and a general POA becomes void if you become incapacitated.
Durable POA
A durable POA remains in effect if you become incapacitated. It is a long-term estate planning measure. A durable POA can make important financial decisions on your behalf if you are seriously injured or ill.
Healthcare POA
As the name suggests, a healthcare POA deals with medical decisions. For example, you may not want certain types of medical treatments. If you are unable to express these wishes, the healthcare POA can help better ensure that they are honored.
Limited POA
Limited POAs have very precise instructions. Usually, they only govern one or two specific tasks. For example, a limited POA may be tasked with selling a piece of real estate in your absence. The scope of their powers does not go out with precise instructions.
Choosing the appropriate POA is an essential component of estate planning and long-term care. To go over your options in more detail, it may help to seek legal guidance.