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What is a Power of Attorney?

A Power of Attorney (POA) is a legal document that grants someone the authority to act on behalf of someone else.  The person granting the authority is the principal of this document, and the individual acting on their behalf is an agent or an attorney-in-fact. The Power of Attorney grants the agent specific rights to make decisions and take actions in various areas, such as finances, real property, or healthcare, when the principal is unable, unavailable, or unwilling to make those decisions on their own.

To complete a Power of Attorney, the principal must be at least 18 years old and of sound mind.

There are several types of documents granting authority to an agent or attorney-in-fact, ranging from general to limited. Below are five common types of Power of Attorney documents and their general uses:

1. General POA: This POA grants broad authority to the agent, allowing them to handle a wide range of matters.
   1. An example could be one spouse of a married couple granting Power of Attorney to the other spouse in the event of an accident, or if one of the spouses is out of the country for an extended period.
2. Limited POA: A limited POA is for specific tasks or situations, and can be very detailed to ensure the limitations are apparent.
   1. A principal could use a Limited POA when they want an agent to act for them during the sale of a specific property.
3. Durable POA: Durable means the granted rights remain valid even if the principal becomes incapacitated.
   1. Granting a durable POA could be used if you own a business and want the uninterrupted operation of the business to continue if the principal becomes incapacitated or passes away. The durable POA can grant rights usually associated with other POA documents.
4. Healthcare POA: This POA grants explicit authority to make medical decisions on behalf of the principal. The Healthcare POA is also known as a Living Will or Medial Directive.
   1. An example of this POA could be when your child goes to college. If your child is over the age of 18, you no longer have the right to make medical decisions on their behalf without their permission. Your college student could use a Healthcare POA to grant their parents rights to make medical decisions in the event of an accident or illness.  
5. Financial POA: The Financial POA grants authority to manage the finances for the principal. Financial management could be specified in general or limited terms depending on the specific needs of the principal.
   1. A possible need for this POA is if the principal is frequently travelling and needs an agent to pay their bills while they are away. Another example is if a principal grants authority to someone to handle their investments or manage their bank accounts.

These are examples of the various types of Power of Attorney documents and their potential uses. At Estate Document Solutions, we can expertly prepare any of the necessary Power of Attorney documents for you.

While document preparation services are beneficial and affordable, we cannot provide legal advice or representation. In the event the client has a complex situation or is involved in some litigation, they should consult with a licensed attorney for legal advice. At Estate Document Solutions, we are careful to stay within the boundaries of the law. If the client needs to consult an attorney, we can refer them to attorneys we know and have worked with.

If you would like a consultation to discuss the preparation of any estate planning documents, please get in touch with us.