Though most of us have heard the term “power of attorney,” few know what a power of attorney is and what it can do. Not every power of attorney functions the same way and some types are better suited than others, depending on your needs. Here is what you should know about a Missouri power of attorney for Kansas City residents.
The basic definition of a power of attorney
A Power of Attorney is a legal document that authorizes one person, referred to as the agent, to act on behalf of another, known as the principal. Typically, a power of attorney is executed for the purpose of handling legal, financial or medical matters for someone when they are unable to do so themselves. A power of attorney can be used to pay bills, manage bank accounts, financial portfolios and real estate investments. The power of attorney identifies the particular tasks or duties the agent will be authorized to perform. A power of attorney does not require you to give up the right to manage your own affairs, but simply allows someone else to act on your behalf if that becomes necessary.
Not all powers of attorney operate the same way
Every client’s needs are not the same, so not every type of power of attorney operates the same way. One basic difference may be the scope of the authority granted to the agent. A Missouri power of attorney can provide broad authority or it can be special or limited. The authority you convey can either start immediately or only after a specified event occurs.
How a Special Power of Attorney is different
The primary difference between a General Power of Attorney and a Special Power of Attorney is the scope of authority the agent is conveyed over the principal’s affairs. A general power of attorney basically gives broad power to the agent concerning a category of issues, such as medical, legal, financial or business decisions.
A special or limited power of attorney, on the other hand, spells out the specific choices the agent can make on behalf of the principal. For instance, a limited power of attorney can be created for the specific purpose of allowing your spouse to make medical decisions for you if you become incapacitated. Another example would be creating a power of attorney that allows a business partner to handle certain business affairs on your behalf if you ever become incapacitated.
Yet another illustration is the situation where a principal who owns rental property needs an agent to handle all aspects of managing that property, perhaps while the principal is out of town. The agent’s powers would most likely include collecting rent, negotiating terms with prospective tenants, and evicting tenants, if necessary. Once an agent completes the tasks required in a limited power of attorney, the powers are terminated and the legal document is no longer effective.
Examples of different types of Missouri powers of attorney
- General Financial Power of Attorney. A general financial power of attorney allows the agent to transact any or all business, other than health care, for the principal.
- Durable Financial Power of Attorney. A durable financial power of attorney remains in effect even if the principal becomes incapacitated.
- Durable Power of Attorney for Health Care. A durable power of attorney for health care gives the person you designate the power to make health care decisions for you. These decisions can include consent, refusal of consent, or withdrawal of consent to any care, treatment, service, or procedure to maintain, diagnose, or treat a physical or mental condition.
- Military Power of Attorney: Federal laws make special provisions for the drafting of powers of attorney for Military personnel, in order to allow a spouse or other agent to handle their affairs while they are deployed.
A power of attorney allows you to choose your agent
It may seem pretty simple, but there is a big plus in being able to choose an agent to handle your personal matters on your behalf. If you do not select that person now, and you later become incapacitated, a judge will make that decision for you. For most clients, the opportunity to make that decision themselves is very important. In selecting an agent, you should consider the attributes of your friends and family, and determine who you would trust most to manage your personal affairs when the time comes. Without a power of attorney, the court will likely need to appoint a guardian to handle your affairs.
If you have questions regarding powers of attorney, or any other estate planning matters, contact Gaughan & Connealy for a consultation either online or by calling us at (816) 974-3030.