What Are the Different Types of Power of Attorney?
Have you included power of attorney in your estate plan? Power of attorney (POA) is a legal document that grants someone the power to make important decisions on your behalf. However, there are many different types of power of attorney designations, and choosing the best one can feel overwhelming. At Phelps LaClair, we want to help you get your affairs in order as painlessly as possible. Continue reading to learn about the different types of POA so that you can confidently design an estate plan that best protects your future.
Five Different Types of Power of Attorney
1: Durable and Non-Durable
Much like other important estate planning documents, durable power of attorney helps you prepare for an uncertain future. If you fall into a coma or become otherwise incapacitated, your agent can continue to act on your behalf if you have granted them durable power of attorney. Typically, power of attorney is automatically deemed durable unless you specify otherwise in the POA document.
Sometimes power of attorney is necessary while you are still of sound mind. For instance, you may need someone to make investment decisions or sign certain documents on your behalf because you can’t be present to do so yourself. If that person isn’t someone you trust to also make decisions for you if you become incapacitated, you must specify in the POA document that their duty is non-durable. You can also dictate in the POA document that your non-durable power of attorney agent loses that power after a set amount of time, or after completing a specific transaction.
A financial power of attorney is another way of limiting your agent’s power. A financial power of attorney agent can be non-durable or durable, but they can only make decisions regarding your finances. For example, they can complete bank transactions, pay your bills, sell your real estate, file your taxes, etc. However, they don’t have to be in charge of all of your finances. You can specify exactly which aspects of your finances your financial power of attorney agent can manage.
A medical or healthcare POA is a type of advance directive that protects your wishes when it comes to medical care. Your medical power of attorney agent can make decisions regarding your treatments, medications, surgeries, and other healthcare details based on your wishes.
A POA is typically effective immediately upon signature, but some states, including Arizona, allow for springing power of attorney. A springing POA agent does not have the power to act for you unless the specific condition named in the document (like becoming incapacitated) is met.
A general POA agent can make financial, health, legal, and business decisions on your behalf. However, there are still certain limits. For example, they cannot sign a marriage document on your behalf nor can they make any changes to your will. General power of attorney can be durable or non-durable.
Should you have more than one power of attorney agent?
Because there are so many types of power of attorney, you may be wondering, “can I choose more than one?” Legally, yes, you can. If you wish to have more than one POA agent, it’s best to grant them each a different type of power of attorney. For example, many people choose separate medical and financial power of attorney agents, depending on the qualifications of each person.
However, just because you can have more than one power of attorney agent doesn’t always mean you should. Naming multiple people for one type of POA can become complicated. Any conflict between co-agents may delay them when trying to make important decisions, so make sure to stick to one person per type of power of attorney.
No matter how many people you choose to be POA agents, it’s always a good idea to name a primary agent and an alternate agent who can take over in the event of the primary agent’s death or incapacitation.
Start Planning for Your Future
Whether you are new to estate planning or have already developed an estate plan, it’s essential to consult a professional. An estate planning attorney knows how to ensure that your estate plan properly reflects your wishes. The experts at Phelps LaClair in Arizona can help you create the best power of attorney document to protect your future. Call 480-892-2488 today to schedule a consultation.
Images used under creative commons license – commercial use (2/17/2022). Photo by Dario Valenzuela on Unsplash