It cannot be denied that finding the right power of attorney form is among the most critical tasks. After all, there is no room for error when preparing such a legal document. For this very reason, you should spend some time learning about the basics of POAs before attempting to create one.
Specifically, it would be imperative to gather detailed information about the most common types of power of attorney templates so that your endeavors would not end in disappointment. Worry not, though, as engaging in a quest for knowledge is easy: just read on.
General Power of Attorney
You probably have one question in mind at this point: when would it be crucial to prepare a power of attorney? Simply put, it would be most advantageous to create such a document if you believe that you require the assistance of another person in making decisions regarding financial matters.
In particular, from the simplest fund transfers to significant transactions, your POA representative would make all the necessary choices as if they were you. Though, you should remember that there are several particular kinds of powers of attorney, each having its distinct purpose.
Specific (Limited) Power of Attorney
Since the first kind of power of attorney is “general,” it is evident that the second type is called “specific.” It should be emphasized, however, that there is a significant difference between the aforesaid legal documents.
To explain, while it would seem convenient to allow someone else to manage your assets, there is considerable risk involved in such a decision. Indeed, preparing a specific power of attorney would sometimes be a wise course of action, especially if assistance would only be needed in some instances: allowing another person to complete a deal while you are away is a perfect example.
As pointed out, both general and specific powers of attorney are unique. This does not mean, though, that they are without any similarity. Such documents are only valid for a limited amount of time: a duration that every grantor would have to specify when preparing any of the above-mentioned legal documents. Since there are scenarios in which the limits in terms of validity would cause problems, grantors also have the option to transform their power of attorney into a legal document that remains unaffected by time: a durable power of attorney.
Durable Power of Attorney
As pointed out above, a power of attorney is essentially a means to authorize another person to act as your representative in some issues. This does not mean, though, that the permission remains valid in all cases. In particular, if ever you were to die or suffer from an incapacitating accident suddenly, then the above-mentioned legal document would immediately lose its applicability. With this in mind, it becomes clear why some people make it a point to add durable provisions to the letter, which ensures its validity no matter what happens to the grantor.
Since a power of attorney may remain effective even if the grantor becomes incapacitated, it can be used to give an individual permission to make the necessary health care decisions. Precisely, if you believe that you should allow another person to decide whether it would be most beneficial to terminate life support if ever you end up relying on life-maintaining machines, then you should prepare a durable health care power of attorney. You should never forget that it would not be enough to merely present such a document in some places: preparing additional documents is a must in some states.
Springing Power of Attorney
At this point, you might have a particular question in mind: would it be possible to prepare a power of attorney that only becomes effective if a person dies or loses the capability to grant legal permission? The answer to such a query is yes. A springing power of attorney only becomes valid if the grantor loses the capacity to handle their vital matters. A springing power of attorney can be further tweaked to be very specific in defining the term “incapacitated.” It must be emphasized, however, that not all states allow people to prepare such a document.
Choosing the Right Type
The first type of power of attorney is referred to as “general”: a form that makes it possible for another person to act on your behalf when financial matters emerge but becomes void as soon as the principal becomes incapacitated.
The second variant of such a legal document is called a specific power of attorney, which is ideal for people who only require help in one or two aspects of their life.
Of course, the durable power of attorney is perfect for someone who wants to have a reliable representative take care of their matters even if you become unable to handle everything on your own.
And the springing POA is great for someone who wants an agent to act ONLY when they become incapacitated.
Indeed, you should keep in mind that deciding on the right power of attorney is vital, as doing so would have implications on how dire scenarios would be handled.