Easy Guide to Power of Attorneys (POA)

Understanding the concept of a power of attorney, or POA, is an essential aspect of planning for retirement and beyond. The concept of “power of attorney” references the power under the law that an individual has to act on behalf of another person in legal, medical, or financial matters. A power of attorney is a principal-agent relationship wherein a principal grants an agent a license to act on the principal’s behalf.

For those of us caring for senior adults, the power of attorney relationship can seem foreign, but in reality, it’s a very common (and efficient) way of ensuring your loved one is cared for. The typical example of a power of attorney relationship is an elderly parent (as the principal) granting a power of attorney to one of their children (the agent). However, there are many different types of powers of attorney.

In this post, we will explain the differences between some of the most common types of powers of attorney.

Types of Power of Attorney

A power of attorney can be suited to fit your loved one’s unique situation, needs, and wishes. There are several types of power of attorney: general, limited, medical, durable, and springing. The nuances of each type (and the laws surrounding them) may vary from state to state. 

General Power of Attorney

A general power of attorney is a type of non-durable POA that allows an individual acting as an agent to make financial and legal decisions on the granting individual’s behalf. Some examples of activities a general power of attorney may complete for the granting individual (or principal) include buying and selling real estate property, trading or selling stock, signing documents, entering into contracts for services like housing or health aids, or paying bills.

The general power of attorney’s so-called “non-durability” means exactly what it sounds like: it will not last forever. A non-durable or general power of attorney is one in which the power to act becomes void if the granting individual becomes mentally incapacitated or, in other words, incapable of making decisions for themselves. For this reason, a general POA is not recommended for individuals nearing the end of their life or at risk for dementia or Alzheimer’s.

Medical Power of Attorney

A medical power of attorney is a type of POA designed to allow an agent to make medical decisions for the principal or granting individual. An individual can only be deemed a medical power of attorney if the principal has become incapacitated, or in other words, unable to make their own decisions. A medical POA cannot be granted to an agent if the principal can still make their own medical decisions.

Durable Power of Attorney

A durable power of attorney is a type of POA that lasts (or is durable) all the way through to the end of the principal’s life, even if the principal becomes incapacitated. This type of POA is recommended for individuals that want to extend long-lasting authority to an agent (including a child, spouse, or sibling) to make financial and medical decisions on their behalf. The power of attorney will not end if the individual becomes incapacitated. The individual may also revoke a power of attorney as long as that individual is deemed mentally competent. 

Limited Power of Attorney

As previously discussed, certain types of power of attorney are not complete in their scope. A power of attorney can be granted to an agent for just one or a few limited activities, such as signing a particular document or selling a particular property. After the activity is completed, the limited power of attorney is revoked.

Springing Power of Attorney

A springing power of attorney is a type of POA in which a principal (i.e., an elderly parent) can designate an agent individual (i.e., an adult child) to act on their behalf when and if the principal becomes incapacitated. Think of the springing POA as a type of POA that “springs” into action when the principal needs it, but not before. This type of POA allows seniors to retain agency over their lives for as long possible while still planning for the future.

Learn More From Shelby Park Manor Today

Shelby Park Manor isn’t just a wonderful 55+ independent living community—we’re also a resource for family members who are helping their elderly loved ones with the transition into independent senior living. Please contact us today if you’re looking for more resources or want to schedule a tour of our luxury senior community.

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