An estate planning attorney has many tools in his arsenal. A power of attorney is one of those invaluable tools. Every power of attorney is unique and should be drafted specifically to accomplish the needs of each client. Each power of attorney also has its own terms and limitations. But what is a power of attorney, exactly?
The legal definition of a power of attorney
A power of attorney is a legal document that gives one person the authority to act on behalf of another. The “principal” is the person who creates the power of attorney and the person who is given the power to act is known as the “agent.” The most frequently used power of attorneys are those with the purpose of handling the financial affairs or medical treatment of someone else. Powers of attorney can be general or limited. It is always best to discuss your particular needs with your estate planning attorney in order to be sure the document is drafted properly. Your attorney understands that the needs of each client and their families are different.
How a general and limited power of attorney are different
A general power of attorney typically provides very wide-ranging authority. So, for instance, if the power of attorney is for financial affairs, then the agent will have the authority to conduct any necessary transactions as long as they are for the benefit of the principal. A limited power of attorney, on the other hand, provides very specific instructions with certain limitations on the agent’s scope of authority.
Another way to look at the difference is that a general power of attorney is used to give full authority to handle all important decisions so the principal’s affairs will not be left unattended. While, a limited power of attorney provides instructions for very specific duties or transactions. Once those duties have been accomplished, the powers are then revoked.
What is a durable power of attorney?
A durable power of attorney can be a very useful estate planning tool. In most cases, a power of attorney is automatically revoked when the principal becomes incapacitated for any reason. But, a Durable Power of Attorney is a specific type of power of attorney that remains in effect despite the principal’s incapacity. A durable power of attorney can be drafted so that it does not become effective until the principal is found to be incapacitated.
What language is necessary to make it durable?
In order to make a power of attorney “durable” the document typically contains the following type of language: “This power of attorney shall not be affected by subsequent disability or incapacity of the principal or a lapse of time,” or “This power of attorney shall become effective upon the disability or incapacity of the principal.” Still, it is important to remember that, in order for a durable power of attorney to be valid it must be signed by the principal before incapacity or disability.
What is a “springing” power of attorney?
Another helpful type of power of attorney is referred to as a “springing” power of attorney. This type of legal document is drafted so that it does not go into effect until a physician certifies that the principal has become incapacitated. With this type of power of attorney, you can maintain control of your affairs until incapacity, at which time the power of attorney would “spring” into effect.
A power of attorney for health care
A durable power of attorney for health care is another important estate planning tool which allows you to appoint someone to be your health care agent. That person will then have the authority to make health care decisions for you when necessary so that you continue to receive the type of medical treatment you need.
If you become sick or injured to the point where you cannot communicate your health care decisions, your power of attorney will spring into effect immediately and your agent will be able to make those decisions for you. However, if there is ever any question about your ability to understand and communicate clearly, your doctor must decide whether to follow the power of attorney. On the other hand, if your power of attorney for health care is drafted so that it becomes effective immediately, there will be no need to involve a doctor.
If you have questions regarding a power of attorney, or any other estate planning matters, contact Gaughan & Connealy for a consultation either online or by calling us at (913) 262-2000. Join us for a free workshop!