Why do you need a power of attorney?
A Power of Attorney (POA) lets you choose who will have the power to act on your behalf in certain situations. If you do not have a power of attorney and become unable to manage your own affairs, a court may have to appoint someone to act for you. A power of attorney allows you to choose who will act for you and defines his or her authority and limits, so he or she can act without court supervision.
There are 2 main reasons why you would need a POA.
- For a specific transaction or time period – also known as a limited power of attorney (LPOA)
- For when you are incapacitated or unable to make decisions – also known as a general power of attorney. This POA normally forms part of Estate Planning to ensure someone can handle all financial matters.
Different types of Powers of Attorneys
There are various types of Powers of Attorneys and the one you choose will depend on your requirements and your situation at the time.
Non-Durable or Special Power of Attorney?
The Special Power of Attorney is used for a limited time period or for a specific financial transaction or the sale of a specific property. The agent is only authorized to act on behalf of you for what is specified in this POA. This is normally required in cases where you need to have someone act on your behalf on a transaction due to illness or prior commitments or even when you are out of the country. The POA ceases when the transaction is completed or if you are incapacitated during this period.
Durable or Financial Power of Attorney
A durable power of attorney does not have a set time. It allows you to choose who will act for you in contract and financial matters when you are incapacitated. The durable POA becomes effective the moment you sign the document and it continues if you are incapacitated. It expires upon your death.
Springing Power of Attorney
The springing power of attorney is similar to the durable POA with one main difference, it is effective only when a specific event takes place. For example, the springing POA could stipulate that it will only become effective when your doctor has determined that you are incapacitated or unable to handle your affairs. It will be in effect until you die or until it is nullified by the court.
Health Care or Medical power of attorney?
Medical power of attorney is a legal document in which you appoint an agent to make medical decisions for you in the event you are unable to express your preferences about medical treatment. Most commonly, health care power of attorney occurs either because you are unconscious or because your mental state is such that you do not have the legal capacity to make your own decisions. The only authority your agent has is over Medical decisions. Choosing the right person to act as your health care agent is important as they have will have to understand your wishes and make decisions for situations that might not have been anticipated.
What happens if I do not have an POA?
If you are incapacitated or incapable of making decisions, then the court will appoint a guardian or conservator to handle your affairs. This is far more complicated and costly.
A power of attorney is a powerful legal document and it’s imperative that it is written correctly and understood how and when it should be used for your protection. If you don’t currently have a power of attorney or your previous one is more than 3 years old, call our office today – 214-269-4290.
Contact us for more information about your power of attorney requirements in Plano.