A power of attorney is a very significant tool for property planning, but there are also many different types of attorney powers that can be used for various purposes. It is necessary to understand what your choices are before implementing this vital document.
A power of attorney allows an individual you appoint—your "attorney-in-fact" or agent—to act for financial or other purposes in your position when and if you ever become disabled or if you are unable to act on your own behalf. There are four major forms of power of attorney.
Limited Power of Attorney
A limited power of attorney gives someone else the power, for a very limited purpose, to act in your position. A limited power of attorney, for instance, might grant someone the right to sign a property deed for you on a day when you are out of town. It usually ends at a time that is specified in the document.
General Power of Attorney
A general power of attorney is exhaustive and offers all the powers and privileges that you have yourself to your attorney-in-fact. For example, your attorney-in-fact can be granted the right to sign papers for you, pay your bills, and perform money transfers on your behalf through a general power of attorney. If you're not incapacitated, but still wanted someone to assist you with financial aspects, you could use a general power of attorney. The General Power of Attorney will stop on your death or disability unless you rescind it before then.
Durable Power of Attorney
A durable power of attorney may be general or limited in nature, but it remains effective after you become disabled. If you become incapacitated, no one can represent you without a durable power of attorney unless a court appoints a conservator or guardian. Unless you rescind it when you are not incapacitated, a durable power of attorney will remain in effect until your death.
Springing Power of Attorney
Like a durable power of attorney, a springing power of attorney may allow your attorney to act for you if you become disabled, but it will not become effective until you are disabled. When you're using a spring power of attorney, it is very essential that the standard for evaluating the incapacity and activating the power of attorney be clearly set out in the document itself.
Irrespective of what kind of power of attorney you use, it is essential to think about who will really be your attorney-in-fact. Your attorney-in-fact is going to have a lot of influence over your finances, and it is important that you fully trust him or her.
If you have any questions about a power of attorney document, contact the Law Firm in New Haven, CT