Types of Power of Attorney
There are four types of power of attorney agreements. Some allow the agent to oversee all your medical and financial affairs, while others apply to specific areas. Additionally, different POAs come with different time constraints.
General power of attorney
A general POA allows the agent to act on behalf of the principal in legal and financial matters. A general power of attorney becomes invalid if the principal becomes incapacitated, so it’s not a smart choice for seniors with dementia or Alzheimer’s.
A senior may use a general POA to allow an agent to pay bills or enter into a home health contract on their behalf. Most commonly for seniors, agents use this responsibility to manage a principal’s finances, sell property, and make end-of-life medical decisions.
Limited power of attorney
A limited power of attorney permits the agent to act in place of the principal (your aging parent) in specific areas for a set amount of time. For example, a person may delegate authority to someone for a business transaction, such as a real estate acquisition.
Durable power of attorney
A durable power of attorney is a legal document that gives a certain person or organization the power to manage your legal, property, and financial affairs when you are unable to do so. This includes signing documents, accessing your bank accounts, and buying or selling property. It is labeled as “durable” because it persists or remains in effect even after the principal becomes incapacitated. Although the agent in a durable power of attorney is given the authority to pay the principal’s health care bills, they cannot make medical decisions, such as whether to change treatment plans or turn off life support on the principal’s behalf.
Springing power of attorney
In contrast to POAs that take effect at signing, a springing power of attorney only becomes active once the principal is declared mentally or physically incapable by a medical doctor. When setting up a springing POA, the principal can indicate a specific doctor who they trust to make a competency assessment.
While this may sound ideal in certain situations, a springing POA can pose numerous problems. If the senior’s doctor or doctors don’t consider you incapacitated, the power of attorney does not take effect, regardless of how chaotic things get or the areas of your life where you could use the assistance. For instance, your rent, taxes, health care, or credit card bills could remain unpaid for long periods, and no one would have the legal authority to take over your finances or discuss them with someone else on your behalf.