A Power of Attorney is different than an Advance Healthcare Directive because an Advance Healthcare Directive only allows another individual to make healthcare decisions on a principal s behalf. It talks about specific circumstances under which a principal would like someone else to be their agent for health and allows a principal to define the types of authority they would like the agent to have. A Power of Attorney is similar, but is used only for financial decisions.
A Springing or Conditional POA only goes into effect if a certain event or condition occurs. It can end at a specific time, when you become incapacitated or when you die.
The most important part of this document is the choice of agent. This person will be in charge of many financial assets once the principal sign sthe document. Generally, people select close family members, such as spouses or children, or long-time friends. However, any person whom a principal trusts to make the best decisions on their behalf can be chosen. Be aware that if the principal chooses a spouse and then later ends the marriage, the spouse s power will automatically terminate.
Yes, there are four types of POA forms.
- General: A general Power of Attorney form allows your representative to manage all of your property-based and financial affairs. This type of POA grants them general authority.
-Specific/Limited: A specific Power of Attorney form limits your representative s responsibilities to certain types of decisions. You can choose to allow someone to only make decisions in relation to business, for example.
- Ordinary: An ordinary Power of Attorney is only valid while you, the principal, are capable of making decisions. This type of POA becomes invalid in the event that you become incapacitated.
- Durable: An enduring Power of Attorney is when the contract continues even if you, the principal, become incapacitated.
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