A Power of Attorney allows one to designate another person or organization to act on one’s behalf to handle financial, legal or medical if one is unavilable or unable to do so. The person designated is known as the attorney-in-fact. There are many types of powers of attorney, including general power of attorney, limited power of attorney and healthcare power of attorney. You should discuss these with your parent and, if appropriate, consutl with an attorney to see which ones would be prudent for your parent to have in force.
“There are many types of powers of attorney, limited power of attorney, general power of attorney, durable power of attorney, springing power of attorney and financial and medical powers of attorney.”
General power of attorney - allows an individual’s designate to conduct a wide variety of transactions, including banking transactions, buying or selling property, enetring into contracts, exercising stock rights, buying or selling real estate, among others.
Limited power of attorney - allows an individual’sdesignate to act only in specific situations, such as to sell a house or sell one’s car.
Durable power of attorney for healthcare - legal document by which someone grants authority to another person, known as an agent, to make decisions regarding medical care in the event the person is unable to do so, due unconsciousness or lack of mental capacity. In additon to naming a primary health care agent, a secondary and tertiary health care agent should be identified in the event the primary agent is not available.
Springing durable power of attorney - allows an individual’s designate to specifiy a future condition under which the durable power of attorney becomes effective, such as when a person becomes incapcitated. This is useful if one is uncomfortable giving someone the ability to act in one’s behalf immediately.
Durable versus non-durable power of attorney
A durable power of attorney differs from a power of attorney in that it remains in effect in the event that the person granting the powers becomes incapcitated, while a non-durable power of attorney becomes void upon incapcitation. It is important to think through what is best in your family’s situation regading powers of attorney and whether or not they are made durable. For instance, if your parent were to be permanently incapcitated, the family would be unable to dispose of property without going through a costly court proceeding to have someone be granted conservatorship or guradianship status to act in your parent’s behalf. Court approval would be needed for every act and a regular accounting to the court would be required. Having durable powers of attorney allow your parent to specify who makes which decisions regarding their affairs and avoid significant court costs in the event of his or her incapacitiation.