Assigning a power of attorney (POA) is an important aspect of estate planning. If you are helping a loved one or making arrangements for yourself, you should know that there are many types of power of attorney, and each has its own rules. Today, Davidson Law Group discusses common powers and the difference between a durable and a regular power of attorney.
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What Does a Power of Attorney Do?
You can decide exactly what authority to give your POA, but some common powers include:
- Buying, selling, and managing real estate
- Paying bills
- Filing tax returns
- Making donations or gifts
- Handling legal or insurance claims
- Regulating business transactions
- And more
When drawing up a POA, you have the choice to make it general or limited. A general POA may include a mixture of the powers described above, such as financial, legal, business, and medical. A limited (also called a special) POA simply limits the powers given to the agent.
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What Does a Durable Power of Attorney Mean?
A durable power of attorney refers to the particular language of the legal document. It states that the agent’s power continues if you become incapacitated — there’s no deadline after which these powers expire. A durable POA remains active until the person passes or until they choose to deny the power given to their agent.
There are specific types of durable POA, and the main ones are:
- Financial Power of Attorney – Should you become incapacitated, this gives your agent the authority to manage your financial affairs.
- Medical Power of Attorney – Your agent has the authority to make medical decisions for you if you’re unable to do so yourself.
Why Are There So Many Different Types?
The person who you want to make medical decisions on your behalf could be your spouse. However, your spouse may be less equipped to make financial decisions than a business partner would. So, there are different types of POA for specific purposes, and it’s a significant responsibility for one person to handle every decision.
What About a Regular Power of Attorney?
A regular or general power of attorney is different. It ends as soon as you become incapacitated. Depending on your or a loved one’s needs, a durable power of attorney may be the better option.
Ready to Draft a Power of Attorney?
If you’re ready to put a power of attorney in place, but you’re unsure of which one(s), the Davidson Law Group can help you decide. We assist our clients with all elements of estate planning and elder law, and we offer a free consultation. Reach out to Davidson Law Group in Fort Worth, Allen, or Tyler today.