A power of attorney (POA), is a legal document granting one individual the right to make financial, medical or business decisions on behalf of another individual. The signee of a POA is called the agent or attorney-in-fact, while the individual authorizing the agent to act on their behalf is called the donor, grantor or principal.
There are different types of POAs depending on a donor’s life situation, and each type of POA grants the agent various levels of power for different given circumstances. While some POAs grant the agent with the ability to handle financial and business transactions for the donor, other POAs provide the agent with the capability to make important medical decisions on behalf of the donor. Below, estate planning attorney Douglas C. Lauenstein provides an overview of the different types of POAs and what they cover.
A Health Care Power of Attorney Gives an Agent Medical Power
POAs also have varying levels of permanency depending on the life circumstance of the agent, and in some cases, POAs can follow more specific criteria depending on the needs of the donor. For example, a health care POA grants the agent the ability to make medical decisions on behalf of a donor who is mentally incapacitated, unconscious or otherwise unable to make important decisions on their own. In most cases, this POA may even allow the donor to include their decision about whether they would want to be kept on life support. Under the circumstances of a health care POA, the agent is legally bound to carry out the medical requests outlined by the donor. In Maryland, it is advisable for a person to have an Advanced Medical Directive and Health Care Power of Attorney prepared in one document. The Advanced Medical Directive, if prepared properly, will combine the elements of a living will and health care power of attorney in one document.
A Durable Financial Power of Attorney Grants the Agent With More Power
Durable POAs, or dPOAs, allow for the agent to continue their right to make important financial or medical decisions for their donor even if the donor becomes incompetent in the future. A durable POA is especially important for someone facing a possibility of becoming mentally or physically incapacitated in the future, as their agent will still be able to retain legal authority.
A Special Power of Attorney is More Specific
In a special POA, a donor has the ability to outline exactly the specific powers that the agent is granted. This type of POA is commonly used when the donor is out of the country and needs to go to settlement on a piece of real estate, or is otherwise unable to handle certain commitments. While the special POA is more restrictive in the powers granted to the agent, it is more explicit in exactly what rights the agent has in the donor’s financial, medical or business decisions.
A Power of Attorney Should be Granted to a Trustworthy Agent
Because the agent who signs a power of attorney now has the legal right to make important decisions regarding the donor’s health, finances or personal information, it is essential that the agent be someone who can be trusted by the donor. An agent can be a close friend or family member and should be someone who is capable of making important medical or financial decisions for the benefit of the donor.
Speak to a Will and Estate Planning Attorney About What Power of Attorney is Best for You
There are many intricacies surrounding different types of POAs and what they cover. The best solution is to speak to a qualified estate planning attorney who will be able to guide you through the options available to accommodate your unique needs. Douglas C. Lauenstein, who has passionately advocated for his will and estate planning clients for years, wants to speak to you about your power of attorney planning needs. If you’d like to schedule a consultation, contact The Law Offices of Douglas C . Lauenstein today!