When hammering out your estate plan, one of the documents you should consider is a power of attorney. This document’s purpose is to grant someone else control over your affairs if you become unable to make decisions or care for yourself either in the short or long term.
Understanding the subtle differences in the four different types of powers of attorney may help narrow down the best options for you.
1. Limited
A limited power of attorney goes into effect when you cannot be present to tend to financial or legal matters. For example, if you purchase a house but are unable to be present at the closing, a limited power of attorney gives a person of your choosing the authority to execute all documents and act on your behalf. Another name for this is a “special” power of attorney.
2. Durable
A durable power of attorney grants another individual full control over your affairs upon your incapacitation. The powers afforded under this type of document give your agent total power over financial and medical decisions. A durable power of attorney stays in effect until your full recovery or death.
3. Springing
If the idea of giving another person full control over your financial and medical decisions does not suit your needs, then perhaps a springing power of attorney works better. This type of document goes into effect in certain and specific instances, such as when you enter the hospital for heart surgery. All authority granted under this is temporary and goes back to you upon the completion of the procedure.
4. Medical
A medical power of attorney allows another person to make decisions about medical intervention. The agent may make end-of-life and continual care decisions. Typically, this person is someone who knows what your last wishes are and whom you trust to carry them out. This person may use a living will or directive as a guide; however, when push comes to shove, he or she makes the call.
Knowing the meaning and implication behind a power of attorney may help make it easier to determine which route you want to go. When meeting with a professional to go over your will and other estate documents, understanding the differences in the documents will assist you in deciding what works best for your needs.