A term often used when discussing estate planning is power of attorney. There are several types of powers of attorney so it can get overwhelming to know and understand each one. Different powers of attorney follow different guidelines and rules. If you’re not sure what Power of Attorney you should have in place, we will try to clarify this below.
A power of attorney is a document where you give an individual the right to make decisions for you. A lot of times you would give this power to your spouse or child. The individual that you name becomes your agent or attorney-in-fact.
Regular Power of Attorney
Regular powers of attorney can be labeled as “general” or “limited.” A general power of attorney can allow someone to handle bills, loans, file taxes, handle business needs, sign checks and make banking decisions.
A limited power of attorney can specify what the agent can handle and you can also put time frames on those chosen items. You can also create a special power of attorney for a one time event or task, such as handling your business for self operations.
Durable Power of Attorney
A durable power of attorney is a document that gives a person the ability to make decisions for you if you are not able to or become incapacitated. Both types of powers of attorney remain in place until you die. But once you are deceased the powers of attorney are no longer in place. A regular power of attorney is no longer valid if you become incapacitated so its a good idea to have a durable power of attorney as well.
The two main types of durable powers of attorney are typically financial or medical. These give an individual the right to make financial or medical decisions on your behalf.
Having the right power of attorney in place is critical -- making sure they know exactly what exists and where it is located. Within Addio, you can easily add all of your important details so each power of attorney will know exactly what to do to prepare for the unexpected.