What Is a Power of Attorney?
A Power of Attorney is a document by which you, the principal, appoint and instruct an agent to carry out certain duties. Your agent need not be an attorney. For example, a spouse or trusted friend can act in this role. There are four types of Powers of Attorney.
A limited Power of Attorney permits agents to perform specific duties on your behalf. Furthermore, those duties can be specified to only last for a fixed amount of time, and the person assigning the power of attorney chooses the time period.
A general Power of Attorney gives agents broad powers to handle most typical lifestyle situations. It becomes invalid if one becomes incapacitated or dies. This type of document is best avoided as it can lead to misinterpretation. A durable Power of attorney authorizes agents to continue to attend to specified duties even after an individual is incapacitated. A springing Power of Attorney comes into effect only if the person became incapacitated upon the happening of a specified event. The “event" should be clearly defined so as not to lead to disputes among family or caregivers.
A financial Power of Attorney takes care of duties such as paying bills, banking, and investing, and includes real estate matters. Banks may require you and the agent to sign a separate Power of Attorney form conforming to their requirements. The agent also has to sign signature cards to enable him to perform banking needs.
A health care Power of Attorney is used to specify instructions to an agent regarding an individual's health care needs, particularly treatment options, and preferences relating to extending life through technological means. It is this type of Power of Attorney that is referred to as a living will.