Power of Attorney Documents Provided by Knowledgeable Lawyers in Hyannis
A Power of Attorney is a legal document giving one person (referred to as the agent) the power and permission to act for another person (referred to as the principal). The agent can make decisions on behalf of the principal in case of disability, illness, or any sort of incapacitation as certified by a physician.
The authority awarded to the agent can be either broad or limited as defined in the document, and it can be used to make legal decisions on the principal’s behalf in areas such as medical care, finances, and property. A Power of Attorney can begin immediately after the document is signed, or upon a certain event such as when the principal is deemed incapacitated by a doctor.
What are The Different Types of Power of Attorney Documents Available?
A Power of Attorney is a tool often considered when planning for long-term care. They can be classified under two different categories – general and limited. A General Power of Attorney allows the agent to act on behalf of the principal in any and all matters allowed by the state. That includes handling bank accounts, signing checks, and selling property and other assets including stocks, as well as filing taxes, to name a few examples.
A Limited Power of Attorney gives the agent authority to act on behalf of the principal in specified events or matters, or for a specific period of time. As an example, this type of Power of Attorney may allow the agent to handle the principal’s retirement accounts, but does not allow him or her to represent the principal in any other matter. It can also allow the agent to act on behalf of a person while he or she is travelling abroad, and it becomes invalid upon that person’s return to the country.
These two main types of Power of Attorney (POA) are only valid while the principal is in good mental health and not incapacitated. If the principal becomes mentally or physically unable to make decisions for medical reasons, the POA would end unless the principal has signed an additional agreement called DPOA or Durable Power Of Attorney, which will remain in effect after the person’s health deteriorates.
What are The Main Types of Durable Power Of Attorney Agreements?
There are a few different types of DPOAs depending on the desired purpose for them. In general terms, an agent with Durable Power of Attorney is able to continue making decisions on the principal’s behalf in certain property, legal, and financial matters even after the principal’s health deteriorates. Those decisions are spelled out and defined in the agreement. However, this type of DPOA does not allow the agent to make health-related decisions (such as removing the principal from life support, for example).
In order for an agent to be able to make healthcare decisions, he or she must have a Health Care Power Of Attorney (HCPA). This document grants the agent consent to make health-related decisions on behalf of the principal in case of an unfortunate event. This type of Power of Attorney makes the agent legally bound to oversee medical care for the principal.
There is also a third commonly used agreement called Financial Power of Attorney. It allows the agent to handle business and financial affairs for the principal, granting him or her authority to sign checks, file tax returns and deposit Social Security checks. It is used in the event that the principal becomes physically or mentally unable to manage his or her finances on their own.
In any of these, a legal document called springing power of attorney is what contains the conditions defining when a DPOA needs to become active. A springing power of attorney defines the type of event and level of incapacitation that would activate the DPOA, which would otherwise remain inactive up to that point.
Generally speaking, having a Power of Attorney document is important, especially for those who do not have a trust in place, have a chronic condition expected to progress negatively, or simply want to make sure someone will care for their financial and personal affairs once they become incapacitated to do so.
How Can I Know Which Type of POA is Right For Me?
While there are many sources to obtain this type of document on the internet, only a qualified professional would be able to advise you on which POA is right for you, and to craft it according to state requirements. At Boyd & Boyd, we have a team of knowledgeable estate planning attorneys ready to help you with your estate planning and long-term care planning.
Call us at (508) 775-7800 and request to book a free initial estate planning consultation. We are here to help!