Durable & Limited Powers of Attorney

A durable Power of Attorney allows you to legally appoint a person or organization to manage your affairs on your behalf, whether because you become incapacitated, unconscious, mentally incompetent, or otherwise unable to manage your own affairs. Or, in some cases, a financial or limited Power of Attorney will allow an agent to handle their financial affairs or to run a business on their behalf if, say, they will be away for a period of time. The person who signs the document is called the ‘principal’. The person authorized to make decisions on behalf of the principal is called an ‘agent’ or ‘attorney-in-fact’ (not meaning the agent is, in fact, an attorney).

With a valid Power of Attorney, the trusted person you name will be legally permitted to take care of important matters for you-for example, paying your bills, managing your investments, or directing your medical care-if you are unable to do so yourself.

All Powers of Attorney are not created equal however! Each type gives your agent or attorney-in-fact a different level of control, depending on how the document is written. Powers of Attorney are effective only as long as the person who signed the document is alive. Once that person dies, the document becomes null and void. Powers of Attorney are different than an Advanced Directive (aka living will).

Powers of Attorney are important to consider before tragedy strikes (car accident, stroke, heart attack, etc.) The person giving power to another person must be able to sign the document prior to becoming incapacitated. Many times, however, family members don’t consider these important documents until it’s too late.

Taking the time to create these documents is well worth the small effort it will take. If you haven’t signed a durable Powers of Attorney and something happens to you, your loved ones may have to go to court to get the authority to handle your affairs (also called seeking guardianship).

DON’T WAIT UNTIL TRAGEDY STRIKES!

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  • "Durable" in a Power of Attorney

    Most Powers of Attorney end automatically if the principal become incapacitated. If a Power of Attorney contains a clause stating the power does not end when the principal becomes incapacitated, then it is called a durable Power of Attorney. This document can be written to allow the agent to make medical decisions, financial/business decisions, or both. This type of Power of Attorney contains a list of the powers given to the agent and when each power should take effect. For example, the powers may take effect immediately or only if the principal becomes incapacitated.

  • General vs Limited Powers of Attorney

    A general Power of Attorney allows the agent to conduct a wide variety of transactions for the principal. This type of Power of Attorney is used to allow the agent to run the principal’s financial and business affairs. The exact powers given to the agent are listed in the Power of Attorney document. A limited Power of Attorney gives the agent the power to perform only a specific act, such as completing a real estate purchase or making a particular investment. General and limited Powers of Attorney can both be written so that they come into effect immediately or only come into effect if a particular event occurs — for example, the power may come into effect only on a particular date or only if the principal becomes incapacitated.

  • Financial & Medical Powers of Attorney

    A durable Financial Power of Attorney is a Power of Attorney giving your assigned agent the authority to handle financial transactions on your behalf. A durable Financial Power of Attorney is comprehensive; it’s designed to let someone else manage all of your financial affairs for you if you become incapacitated. With a durable Financial Power of Attorney, you can give a trusted person as much or as little authority over your finances as you like.

    When you create a durable Medical Power of Attorney – more commonly called a “durable Power of Attorney for health care” – you name a trusted person (your agent) to oversee your medical care and make health care decisions for you if you are unable to do so. Your agent will work with doctors and other health care providers to make sure you get the kind of medical care you wish to receive. When arranging your care, your agent is legally bound to follow your treatment preferences to the extent that he or she knows about them.