Introduction
Power of attorney is a legal document that allows an individual to appoint someone to act on their behalf in various legal matters. There are different types of power of attorney, such as durable power of attorney and general power of attorney. In this article, we will explore the differences between these two types and their uses.
What is Durable Power of Attorney?
Durable power of attorney is a legal document that remains in effect even if the person who granted the authority becomes incapacitated or unable to communicate their decisions. It allows the appointed person, known as the agent or attorney-in-fact, to make healthcare and financial decisions on behalf of the principal.
Examples of Durable Power of Attorney
- An individual appointing their spouse as their agent to make medical decisions in case they become unable to make such decisions.
- An elderly person designating their adult child as their attorney-in-fact to handle their financial affairs if they develop dementia.
Uses of Durable Power of Attorney
Durable power of attorney is commonly used in situations where individuals want to ensure someone they trust can make important decisions for them if they become incapacitated. It is often used for managing finances, making healthcare decisions, and handling legal matters.
What is General Power of Attorney?
General power of attorney is a legal document that grants broad powers to the appointed person to act on behalf of the principal, allowing them to handle various legal and financial matters. Unlike durable power of attorney, general power of attorney becomes invalid if the principal becomes mentally incapacitated.
Examples of General Power of Attorney
- An individual authorizing their friend to sell their property while they are out of the country.
- An entrepreneur appointing a business partner as their attorney-in-fact to sign contracts and make financial decisions on their behalf.
Uses of General Power of Attorney
General power of attorney is often used when individuals need someone to handle specific legal matters on their behalf. It can be used for property transactions, business deals, bank transactions, and other financial matters.
Differences between Durable and General Power of Attorney
| Difference Area | Durable Power of Attorney | General Power of Attorney |
|---|---|---|
| Continuity of Authority | Remains in effect even if the principal becomes incapacitated | Becomes invalid if the principal becomes mentally incapacitated |
| Scope of Authority | Limited to healthcare and financial decisions | Broader, allowing the agent to act on various legal and financial matters |
| Duration | Continues until the principal’s death or revocation of the power of attorney | Ends if the principal becomes mentally incapacitated or revokes the power of attorney |
| Revocability | Can be revoked by the principal at any time, as long as they are mentally competent | Can be revoked by the principal at any time, as long as they are mentally competent |
| Use during Incapacity | Allows the appointed agent to continue making decisions on behalf of the principal even if they become incapacitated | Becomes invalid if the principal becomes mentally incapacitated |
| Specificity of Authority | Usually specifies the powers granted to the agent, such as medical decisions or financial transactions | Can grant broad or specific powers, depending on the principal’s preferences |
| Financial Management | Allows the agent to handle the principal’s financial affairs, such as paying bills, managing investments, and file taxes | Enables the agent to manage the principal’s financial matters, including banking transactions, signing contracts, and handling business matters |
| Healthcare Decisions | Allows the agent to make medical decisions on behalf of the principal, such as consent for treatment or choosing healthcare providers | Does not grant authority for healthcare decisions |
| Termination | Terminates upon the principal’s death or revocation | Terminates upon the principal’s mental incapacity or revocation |
| Court Intervention | Usually does not require a court application for activation and use | May require a court application for activation or in certain cases |
Conclusion
In summary, durable power of attorney remains in effect even if the principal becomes incapacitated, allowing the agent to make healthcare and financial decisions. On the other hand, general power of attorney becomes invalid upon the principal’s mental incapacity and grants broader powers to handle various legal matters. It is important to choose the appropriate type of power of attorney based on one’s specific needs and requirements.
People Also Ask
- Can I have both types of power of attorney?
Yes, it is possible to have both durable and general power of attorney documents, but they would serve different purposes. It is advisable to consult with an attorney to determine the appropriate combination based on your circumstances. - Can a durable power of attorney override a general power of attorney?
It depends on the specific circumstances and the powers granted in each document. Generally, if a durable power of attorney includes specific powers granted in a general power of attorney, the durable power of attorney would prevail in those areas. - Can I limit the authority of my agent in a durable power of attorney?
Yes, you can specify the powers you want to grant to your agent in a durable power of attorney. You can limit their authority to certain matters or provide broader powers based on your preferences and requirements. - Can a power of attorney be used after death?
No, a power of attorney ceases to be valid upon the death of the principal. After death, the responsibilities shift to the executor of the estate or the appointed personal representative. - Can I change or revoke a power of attorney?
Yes, you have the right to change or revoke a power of attorney at any time, as long as you are mentally competent. It is recommended to consult with an attorney to properly revoke or amend a power of attorney.
