10 Differences Between durable power of attorney and general power of attorney

What is a durable power of attorney?

A durable power of attorney is a legal document that allows an individual (known as the principal) to appoint someone else (known as the agent or attorney-in-fact) to make important financial and legal decisions on their behalf in the event they become incapacitated or unable to make these decisions themselves. Unlike general power of attorney, durable power of attorney remains in effect even if the principal becomes mentally incompetent or incapacitated.

Examples of durable power of attorney:

1. John grants his sister Mary durable power of attorney, enabling her to manage his finances and make healthcare decisions if he becomes incapacitated.

2. Sarah appoints her husband as her agent under a durable power of attorney to sell their property and handle their financial affairs in the event she becomes mentally incompetent.

What is a general power of attorney?

A general power of attorney is a legal document that grants someone else (the agent) the authority to act on behalf of the principal in various matters, including financial decisions, business transactions, and legal matters. Unlike durable power of attorney, general power of attorney ceases to be effective if the principal becomes incapacitated or mentally incompetent.

Examples of general power of attorney:

1. Emily appoints her best friend Lisa as her agent through a general power of attorney to handle her financial transactions while she is out of the country.

2. Michael grants his business partner David general power of attorney to make business decisions and sign contracts on his behalf.

Differences between durable power of attorney and general power of attorney:

Difference Area	Durable Power of Attorney	General Power of Attorney
Continuity of Power	Remains in effect even if the principal becomes incapacitated or mentally incompetent.	Ceases to be effective if the principal becomes incapacitated or mentally incompetent.
Duration	Lasts until the principal’s death, unless revoked or terminated earlier.	Lasts for a specific period or until the principal revokes it.
Scope of Power	Can be limited to specific tasks or financial matters, or broad enough to cover all legal and financial decisions.	Can be limited or broad, depending on the principal’s instructions.
Effectiveness after Incapacity	Remains effective even if the principal becomes mentally incompetent or incapacitated.	Ceases to be effective if the principal becomes mentally incompetent or incapacitated.
Decision-Making Power	Gives the agent the authority to make important financial and legal decisions on the principal’s behalf.	Gives the agent the authority to act on behalf of the principal in various matters.
Revocation	Can be revoked by the principal 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 Travel	Can be useful for managing financial and legal matters while the principal is traveling.	Can be useful for authorizing someone to act on the principal’s behalf while they are away.
Healthcare Decision-Making	May include authority to make healthcare decisions on the principal’s behalf.	Does not typically include authority to make healthcare decisions.
Court Intervention	May not require court intervention for activation or use.	May require court intervention for activation or use in certain situations.
Termination	Terminates upon the death of the principal or if revoked or terminated earlier.	Terminates at a specific time or if revoked or terminated earlier.

Conclusion:

In summary, the main difference between durable power of attorney and general power of attorney lies in their continuity of power and effectiveness after incapacity. Durable power of attorney remains effective even if the principal becomes incapacitated or mentally incompetent, while general power of attorney ceases to be effective under such circumstances. Additionally, durable power of attorney allows for the agent to make healthcare decisions, while general power of attorney typically does not include this authority.

Knowledge Check:

1. True or False: Durable power of attorney remains in effect even if the principal becomes mentally incompetent?

Answer: True

2. True or False: General power of attorney includes the authority to make healthcare decisions?

Answer: False

3. True or False: Durable power of attorney lasts for a specific period of time?

Answer: False

4. True or False: General power of attorney requires court intervention for activation or use?

Answer: False

5. Fill in the blank: Durable power of attorney ____________ to be effective if the principal becomes incapacitated.

Answer: Continues

6. Fill in the blank: General power of attorney terminates at a specific time or if revoked or terminated ____________.

Answer: Earlier

7. True or False: Durable power of attorney can be useful for managing financial and legal matters while the principal is traveling?

Answer: True

8. True or False: General power of attorney can be revoked by the principal at any time?

Answer: True

9. True or False: Durable power of attorney gives the agent the authority to act on behalf of the principal in various matters?

Answer: True

10. True or False: General power of attorney ceases to be effective if the principal becomes mentally incompetent?

Answer: True

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