Power of Attorney vs. Durable Power of Attorney: Understanding the Differences

When it comes to granting legal authority to someone to make decisions on your behalf, power of attorney and durable power of attorney are two common options. While they share similarities, there are distinct differences between the two that are important to understand. In this article, we will explore what power of attorney and durable power of attorney are, provide examples of each, discuss their uses, and highlight the key differences between them.

What is Power of Attorney?

Power of Attorney (POA) is a legal document that grants another person, known as the attorney-in-fact or agent, the authority to act on your behalf in various matters. This authority can include managing financial affairs, making medical decisions, and handling other legal and personal matters. The person granting the power of attorney is referred to as the principal.

Examples of Power of Attorney

Here are a few examples of situations where a power of attorney may be utilized:

Granting someone the authority to sign legal documents in your absence.
Appointing an agent to handle financial matters if you become incapacitated.
Authorizing an individual to make healthcare decisions on your behalf.

What is Durable Power of Attorney?

A durable power of attorney is similar to a regular power of attorney, but with an added provision that allows it to remain in effect even if the principal becomes incapacitated or mentally incapable of making decisions. This provision ensures that the agent can continue acting on behalf of the principal when they are no longer able to do so themselves.

Examples of Durable Power of Attorney

Consider the following examples of situations where a durable power of attorney may be useful:

Granting an agent the authority to manage the principal’s finances and pay bills if they develop Alzheimer’s disease.
Appointing a trusted individual to make medical decisions for the principal if they are involved in a serious accident and are unable to communicate their wishes.
Allowing an agent to deal with legal matters, such as property transactions or business affairs, if the principal is incapacitated.

Uses of Power of Attorney

A power of attorney can serve various purposes depending on the specific authority granted. Some common uses of power of attorney include:

Managing finances and handling banking transactions.
Buying or selling property.
Entering into contracts or legal agreements.
Handling tax-related matters.
Making healthcare decisions and consenting to medical treatments.

Uses of Durable Power of Attorney

Durable power of attorney is particularly useful in situations where the principal may become incapacitated and unable to make decisions independently. It allows the agent to continue acting on the principal’s behalf in areas such as:

Managing investments and financial assets.
Paying bills and managing day-to-day financial obligations.
Making medical decisions and providing consent for medical treatments.
Managing real estate and property matters.
Handling legal disputes and engaging in legal proceedings.

Differences between Power of Attorney and Durable Power of Attorney

Let’s explore the key differences between power of attorney and durable power of attorney:

Difference Area	Power of Attorney	Durable Power of Attorney
Continuity of Authority	The authority granted under a power of attorney ends if the principal becomes incapacitated or mentally incompetent.	The authority granted under a durable power of attorney continues even if the principal becomes incapacitated or mentally incompetent.
Key Purpose	To grant temporary authority to an agent for specified matters.	To grant long-term or indefinite authority to an agent, even in the event of incapacitation.
Activation	Power of attorney becomes effective immediately upon signing.	Durable power of attorney can be effective immediately or take effect upon the principal’s incapacitation.
Termination	Power of attorney terminates upon the death of the principal or revocation.	Durable power of attorney terminates upon the death of the principal, revocation, or when a specified period expires.
Required Capacity	The principal must have the mental capacity to understand the scope and implications of the power of attorney.	The principal must have the mental capacity to understand the scope and implications of the durable power of attorney.
Authorization Scope	The authority granted in a power of attorney can be limited to specific matters or broad and all-encompassing.	The authority granted in a durable power of attorney can be limited to specific matters or broad and all-encompassing.
Legal Requirements	Power of attorney must meet the legal requirements of the jurisdiction where it is executed.	Durable power of attorney must meet the legal requirements of the jurisdiction where it is executed.
Revocability	Power of attorney can be revoked by the principal at any time.	Durable power of attorney can be revoked by the principal at any time when they have the mental capacity to do so.
Agent’s Responsibility	The agent’s authority ends if the principal becomes incapacitated or mentally incompetent.	The agent’s authority continues even if the principal becomes incapacitated or mentally incompetent.
Usage Scenarios	Power of attorney is often used for short-term situations or when the principal expects to be available to make decisions in the near future.	Durable power of attorney is commonly used for long-term planning, advanced care directives, or potential future incapacitation.

Conclusion

In summary, power of attorney and durable power of attorney both serve the purpose of granting authority to an agent for acting on someone else’s behalf. However, the key difference lies in the durability of the authority, with durable power of attorney continuing even in cases of incapacitation. The decision to choose one over the other depends on individual circumstances and the need for long-term planning or potential incapacitation.

10 Differences Between power of attorney and durable power of attorney