All Powers of Attorney Are Not Created Equal
When someone mentions that they have “power of attorney” for someone, most people assume they know what that means. In reality, there are three different kinds of “power of attorney” documents: simple, durable and springing.
The first common type of power of attorney is the broad power to act in every way for the “principal” or person who granted the power of attorney. This type is often effective immediately when the document is delivered to the “agent” or person given power of attorney. The important questions raised by this type are: what happens if the principal becomes disabled and second, is there a way to avoid giving someone so much power until it is necessary?
If the person granting a “simple” power of attorney becomes disabled, then the agent loses their authority to take action for the principal. This is often the opposite of what the principal intends in granting the power of attorney.
In order to avoid this situation, the “durable” power of attorney should be considered. The durable power of attorney specifically provides that the agent’s authority is not affected by the disability of the principal. This provision allows the agent to continue acting for the ill family member or friend during the illness.
Finally, the springing power of attorney should be considered when the person does not want to give someone the authority to act for them until a specific condition has been met: often the inability of the principal to act for himself. In that sense, the springing power of attorney is the opposite of the simple power of attorney.
It is important to remember that there is not a universal power of attorney document. As with all estate planning documents, many of the provisions should be customized to match your situation and your goals. For example, a power of attorney designed for an elder law situation is very different from a power of attorney designed for tax planning purposes. You may desire your agent to have certain powers and may also desire that he does not have certain other powers. The right or wrong power of attorney can make a huge difference in your life. As a result, professional advice should be considered before making this important decision.
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