It’s recommended that your comprehensive estate plan in Palm City include at least one power of attorney. But, there are several documents that include “power of attorney” in the title. Legal documents that have similar names may have very different purposes and consequences. It’s important to know a little about powers of attorney to make sure you choose the right one for you.
The basic power of attorney involves the person signing the document (the “principal”) and the person being given power to act (the “agent”). The agent presents the power of attorney to a third party, which can be a bank, financial institution, or anyone that the agent has dealings with on behalf of the principal. Under current law, a power of attorney must specifically state the powers granted to the agent.
The principal may give an agent the power to act in a specific, limited way. For example, the principal may sign a power of attorney granting the agent the authority to sign documents related to a real estate transaction, but nothing else.
As with all powers of attorney, you’ll give an agent power to act on your behalf in legal and financial matters. The power granted is broad, though, and not limited to a specific act. For example, you may use a general power of attorney to take care of matters while you are out of town for a short time. An agent might sign documents, handle negotiations, or make decisions for you while you are gone.
However, there’s a big disadvantage to using a general power of attorney: The agent’s power ends if you become incapacitated.
One little word – “durable” – makes a huge difference here. Attorneys don’t just add “durable” to the title so the document sounds more official or serious. There’s a real impact on how, and when, the agent may act.
A durable power of attorney contains the following statement or similar language:
A durable power of attorney becomes effective when it is signed by the principal. Unlike the general power of attorney, though, its powers continue after the principal’s incapacity.
Although a Durable Power of Attorney for Health Care can be used by an agent, another document is preferred by medical providers: The Health Care Surrogate Designation. As with a power of attorney, a surrogate is named to make decisions for the principal. However, the surrogate’s authority is limited to decisions related to medical treatment. Also, the surrogate’s authority does not begin until at least one physician determines that the principal is incapacitated.
A power of attorney is a powerful legal document. You can review your options while discussing your estate plan with your Martin County estate planning attorney.