A Power of Attorney (POA) is a legal document that allows you to select an agent to act on your behalf for financial or health-related reasons. A POA can be durable (remain in effect if you become incapacitated or die) or non-durable (void if you become incapacitated or die). Since each state has its own laws governing POAs, it’s important to check local statutes if you move to another state. Otherwise, your POA may be overturned.
1. Durable Power Of Attorney
A Durable Power of Attorney (DPOA) remains in effect if you become incapacitated or unable to make financial decisions for yourself. You can select an agent and direct them to make specific decisions about your property, finances, investments, paying your bills, signing documents on your behalf, and other financial matters specified in the agreement.
2. Limited Power of Attorney
True to its name a Limited Power of Attorney (LPOA) directs your agent to act on your behalf in specific matters or events. For example, the closing on a home sale that you’re unable to attend or managing your retirement accounts. An LPOA may only be in effect for a specific period of time.
3. Springing Power of Attorney
A Springing Power of Attorney gives your agent power to act when a specified condition is met. For example, if you own a business you can appoint an agent to manage it while you’re away. It’s not recommended for when you become incapacitated because the process of determining whether or not you can make your own decisions is time consuming.
4. General Power of Attorney
A General Power of Attorney authorizes your agent to act on your behalf in all situations allowed by local law. A General POA gives your agent considerable power over your affairs however, depending on your state’s law, their powers may be limited.
“This is just one of several types of Advance Healthcare Directives that vary from state to state. Check your state laws to ensure you have the right document.”
5. Financial Power of Attorney
A Financial POA enables the person you name as your agent to manage the financial and business affairs that you specify in the document. These may include paying your bills, managing bank accounts, and other financial duties.
6. Durable Power of Attorney for Healthcare
A Durable Power of Attorney for Healthcare names a person you’ve chosen to make your healthcare decisions according to your wishes when you’re unable to do so yourself. This is just one of several types of Advance Healthcare Directives that vary from state to state. Check your state laws to ensure you’ll have the right document.
To learn more, connect with an FRC® trained advisor.
