An Overview of the Types of Power of Attorneys and What They Can and Cannot Do
A power of attorney is a legal document that allows one individual to appoint another individual to act on their behalf with regards to legal, financial or health matters. In the event that you become incapacitated, it is important to know that a power of attorney is valuable for granting a trusted friend or family member the power to make decisions on your behalf that are made in accordance with your wishes. Here, the wills, trust and estate attorneys at Rodier Family Law provide an overview of the types of power of attorneys and what each can and cannot do.
What Are the Different Types of Power of Attorneys?
The two main types of power of attorney include medical and financial, each of which gives authority to another individual to enact decisions during crucial life events on behalf of the principal. A medical power of attorney, often referred to as an Advance Directive, grants an individual the right to make medical decisions on another individual’s behalf, and is typically needed when the principal, or the individual who authorizes the agent to act, becomes incapacitated either physically or mentally, and is unable to make informed decisions on their own behalf. Financial power of attorney grants the agent the ability to make financial decisions on the principal’s behalf. This can include making important decisions regarding the principal’s personal finances or assets, such as paying their bills or making important transactions, as well as financial decisions concerning their business. In some cases, the same individual is given power of attorney for both financial and medical purposes, however, these responsibilities can be delegated to multiple individuals.
A power of attorney can also be limited or durable. If an agent is designated as having limited power of attorney, they have a specified, allotted amount of time in which they can act on your behalf. For example, if you were out of town for a month, you may select an agent to sign important documents for you during that time, such as a deed to a property. Durable power of attorney remains in effect after you become incapacitated or are unable to perform daily duties. This type of power of attorney also remains in effect until the individual passes away, unless it is revoked.
What Can a Power of Attorney Do?
When a power of attorney is drafted, the rights of the agent has multiple responsibilities to manage on behalf of the incapacitated party. For example, in a medical power of attorney, you can grant a trusted agent or attorney-in-fact the right to make decisions such as what surgical or psychiatric treatments you receive as well as what healthcare providers to visit. Furthermore, you can allow the individual to choose long-term living situations as needed, such as assisted living or in-home aging care. For a financial power of attorney, you can provide your chosen agent access to your financial records and bank accounts to manage expenses and debts. Furthermore, you can give your agent control of managing your property or business and allow them to make appropriate investments if needed.
What Are the Limitations of a Power of Attorney?
While there are various reasons for drafting a power of attorney, there are also certain limitations that come as well. An agent is expected to act in the principal’s best interest at all costs, and if this important responsibility is not met, there can be repercussions, and ultimately removal of power. When granted certain rights under a power of attorney, you are unable to change or update the individual’s will and must maintain the written duties assigned to you. You are unable to transfer the title of “agent” to another individual unless a co-agent was specifically stated in the document. Furthermore, you cannot make decisions for the individual after their death, unless stated in the person’s will.
Speak With a Dedicated Will, Trust and Estate Attorney at Rodier Family Law
Do not wait until you or a loved are unable to make sound decisions medically and financially before consider establishing a power of attorney. Granting the role of “attorney-in-fact” to a close, trusted family member or friend can provide needed relief and assurance that your health and financial wellbeing will be in good hands. To discuss your options about power of attorney, contact the Bel Air will and estate planning attorneys at Rodier Family Law today.