Different Types of Power of Attorney and When to Use Them

What is a Power of Attorney? 

The term power of attorney can be described as a legal authorization given to a designated person to act in someone else's place. Similarly, a power of attorney nominates an attorney-in-fact or agent who acts on the principal's behalf. This acting party is allowed only a limited authority that empowers him to make minor decisions about the principal's finances, medical care, investments, or property. Such a situation for a power of attorney to decide occurs only when the principal cannot make such decisions, underlying a disability or an illness. It can also be subject to the availability of the principal to sign a significant legal or financial transaction. 

A power of attorney is deemed lapsed if the principal dies or revokes the agreement. It can also happen in a court of law invalidating the contract. The agreement is automatically considered void if the creator divorces their spouse, who was a power of attorney. 

Types of power of attorney

Here in this post, we will discuss the types of power of attorney and how they can be used. 

General Power of Attorney 

A general power of attorney is a significant mandate as it gives an agent access to much control over the principal's affairs. The party acting as a power of attorney here is responsible for handling various tasks on behalf of the principal, including disposing or purchasing real estate or even signing a contractual relationship. Moreover, the agent can even access the principal's property, assets, taxes, and bank accounts. An individual must nominate someone trustworthy for a general power of attorney as it involves significant decisions that can also be very risky. Therefore, people usually choose their spouse, children, or an entrusted family member for this position.

Limited Power of Attorney 

When an individual wants to limit the tasks or decision-making power with an agent, they should choose limited power of attorney. While signing the notarizing form for the limited power of attorney, an individual must describe the task as much as possible to avoid granting power for something more than desired. It is advisable to take advice when you are unclear about what falls under the special power of attorney to explore other types of power of attorney as it suits you. 

Durable and Non-Durable Power of Attorney 

A durable power of attorney can only act on the principal behalf for a certain period. On the other hand, a non-durable POA will only end when the creator revokes it or the agreement expires itself. However, some still wonder what happens if the agent falls severely sick, making him/her incapable of acting on the principal's behalf. Will a power of attorney still be applicable in this case? 

The principal usually prefers that a power of attorney remains the same even if they cannot communicate. Especially in cases like the principal becoming comatose, he prefers that the agent remains the same and access a power of attorney to make decisions on his behalf. 

Medical Power of Attorney 

A medical power of attorney is based on emergencies when the principal is in no shape to make decisions regarding the quality of healthcare he prefers. A medical power of attorney empowers an agent to make these decisions on the principal's behalf, assuming that the principal is facing a life-threatening illness. A healthcare power of attorney is usually the durable type required when the principal cannot make his own decisions. 

So this is a very critical go through medical power-of-attorney without consulting a legal counsel. The legal counsel can carefully draft a notarized document to include terms and conditions that are relevant to such power of attorney. It is also suggested that the principal chooses someone from the family for this power of attorney as it requires an element of care and affection. 

How to Choose a Power of Attorney?

Before you go through the power of attorney registration, you must understand how to pick a power of attorney relevant to different cases. You must also be able to differentiate well between the different types of power of attorney that are mentioned above. 

When it comes to your house, property, car, or any other valuable asset, a power of attorney will grant an agent primary ownership, responsibility, and authority. However, with healthcare power of attorney, it is literally a matter of life and death. And you could find yourself bankrupt or in financial provision if you fail at handling durable power of attorney and the agent abuses it. Hence, it is necessary to choose an agent who cares about you and will ensure your wishes are fulfilled to the greatest extent possible. 

It is also not easy to pick a capable and trustworthy person to handle such a responsibility. This person enjoys a similar legal authority as you do. Any mistake can significantly and endlessly impact your life, finances, or business.

When it comes to choices for an agent for power of attorney, it can be anyone who is an adult or even a professional like an accountant, banker, or an actual attorney. However, it is always easier to pick between your family members, such as your adult child, a close relative, or your spouse. Choosing a family member says the cost a professional may charge and will also prevent the necessary sharing of information about your finances, life, family, or business.

Conclusion 

Choosing a power of attorney is indeed a great responsibility, and no information will ever be sufficient to make a completely accurate decision. However, seeking proper legal advice for such a crucial matter is possible. Lawgical India cannot only help you with the power of attorney registration but also give you thoughtful legal advice based on your situation. Our team of legal experts will be available; you can contact us for the same.