What’s the Difference Between Power of Attorney and Durable Power of Attorney?

A power of attorney (POA) is a legal document that grants another person (the agent) the authority to act on your behalf. The document is essential, as it clearly states the powers you grant the agent. You could be granting them the ability to purchase and sell assets or giving them the final word over your medical decisions.

There are four main types of POAs that can then be further divided into different categories based on their purpose. These include general POAs, springing POAs, medical POAs, and durable POAs.

  • General POAs: A general power of attorney grants broad authority to an agent to act on your behalf in a variety of legal and financial matters. This type of POA typically covers business transactions, managing bank accounts, paying bills, and handling financial transactions like selling property or filing tax returns. However, a general POA usually expires if you become mentally incapable or incapacitated, meaning the agent’s legal authority ceases once you lose the capacity to make decisions.
  • Springing POAs: These come into effect only after a specific event or condition occurs, often when you become incapacitated or unable to make decisions for yourself. This type of POA “springs” into action based on a triggering event, which must be clearly defined in the document.
  • Medical POAs: Also known as durable medical power or medical durable power of attorney, this POA allows the appointed agent to make health decisions on your behalf if you are unable to do so. This includes decisions about treatment options, medical care, major medical procedures, and end-of-life care. Unlike a general POA, a medical POA is specifically focused on health care decisions and remains effective even if you become incapacitated.
  • Durable POAs: A durable power of attorney differs from a general POA because it remains in effect even if you become mentally incapable or incapacitated. This means the agent you appoint can continue to manage your financial matters, legal matters, and other affairs on your behalf despite your inability to make decisions. Durable POAs are essential for long-term planning, especially in cases of degenerative disease diagnosis or medical diagnosis that may impair your decision-making ability.
  • Durable Financial Power: This is a specific type of durable POA focused solely on financial matters. It grants your agent the legal authority to handle financial transactions, pay bills, manage bank deposits, sell property, and oversee your financial accounts on your behalf. The durable financial power remains effective even if you become incapacitated, ensuring your financial affairs are managed without interruption.

Understanding the differences between these types of power of attorney documents is crucial when planning ahead. Choosing the right type of POA ensures that your trusted friend, family member, or adult child can make decisions aligned with your wishes, whether those decisions involve health care, finances, or other legal matters. It also provides peace of mind knowing that your affairs will be managed properly, even if you are unable to act for yourself.incompetent.

The powers granted through a general POA and a durable POA can be the same, but only a durable POA would continue to stay in effect if something happened to your mental faculties.

Why Would I Want a Durable Power of Attorney?

A durable power of attorney can be an incredibly useful tool, and some form of POA should absolutely be a part of your estate planning

The first thing a lot of people think about when they hear that a durable power of attorney stays in effect when they are incompetent is that it would be a great way to ensure somebody you trust can take care of decisions for you.

However, if you are strictly thinking of your medical needs, then you want a medical POA. Like a last will and testament, it is always wise to create a medical POA.

A durable POA is best for those who want to grant powers to an agent that they trust completely. If you are concerned about how an agent might act when you aren’t able to oversee things, then a durable POA isn’t the best choice.

However, if you trust your agent, a durable power of attorney can ensure that your business and personal interests aren’t neglected while you recover. Business can continue on like usual, ready for when you return. It’s a vital tool for keeping your affairs in order.

What Are Potential Drawbacks of a Durable Power of Attorney?

As with all things, there are potential drawbacks to a durable power of attorney. This isn’t to say that a durable POA isn’t a power tool; many people certainly have found it to be. Rather, it is important that you consider any potential drawbacks before proceeding forward with a durable power of attorney. This way, you can be sure that you are prepared for any risks instead of being caught by surprise should something happen.

Potential drawbacks of a durable power of attorney include the following:

  • You must be competent in order to execute a durable power of attorney. As such, you will be unable to execute one following certain events, and this could be a drawback. Say you waited too long to execute and were in a car crash that affected your mind. Despite prior plans to execute, you wouldn’t be able to.
  • It ends when you die. Ultimately, this means that a durable power of attorney cannot act like a last will and testament. You will still need to create a will, regardless of any POAs you may have.
  • The courts are not required to oversee a durable power of attorney. This could be a blessing or a curse, depending on the circumstances. For example, not having oversight can mean that things are able to move along faster. But that lack of oversight can lead to exploitation as well.
  • The biggest potential drawback of a durable POA is that the agent abuses the power given to them. This, coupled with the lack of court oversight, means that it can be challenging to do anything about the exploitation. This is one of the reasons it is often better to work with a law firm as your agent rather than an individual since a law firm is a business that can face severe consequences for its behavior.
  • Since there is a lack of court oversight, it can also be quite challenging to ensure that the durable POA is honored. Some places require specific forms to be submitted before complying, while others will just straight-up refuse.

How Do I Obtain a Power of Attorney?

These days, you can find many DIY power of attorney forms online. While these may be simple enough to use for general situations, it isn’t recommended that you use an online form for a durable power of attorney. Or, at the least, we recommend having an attorney go over the form for you before moving forward.

The problem isn’t that it is particularly difficult but that you want to be sure that you are only giving the powers you want to give. The language in a legal document must be precise, and it is easy to mess it up.

A mess-up might mean you open yourself up for exploitation, but it could also mean that your durable power of attorney simply doesn’t work. The only problem with this is that if you are mentally incompetent, you will not be able to fix the issue. So instead of having somebody acting in your best interest, you are stuck out of luck. Better to be safe than sorry, always.

When creating a durable power of attorney, it is crucial to ensure the document clearly specifies the scope of authority granted to your chosen agent, also known as the attorney-in-fact. This can include financial matters such as paying bills, managing bank accounts, handling insurance benefits, and making financial decisions on your behalf. It can also cover health care decisions, allowing the agent to make choices about your medical treatment and health care in case you become unable to do so yourself.

Because the durable power of attorney remains effective even if you become incapacitated due to a medical diagnosis or degenerative disease diagnosis, it is considered an important legal document in estate planning. It works alongside other estate planning documents, like a living will, to ensure your wishes are respected regarding both your finances and medical care.

Furthermore, to be legally valid, the durable power of attorney must be executed following specific state laws, often requiring witnesses or notarization. Consulting with an attorney ensures that the document complies with these requirements and that the language is precise to avoid ambiguity. This careful planning ahead can prevent confusion or disputes later, especially if a court-appointed guardian might otherwise have to intervene.

In summary, while online POA forms might be tempting for their convenience, the complexity and importance of a durable power of attorney warrant professional assistance to protect your interests and ensure your wishes are honored now and in the future.

Contact an Attorney to set up a Power of Attorney Document Today

If you are looking to work with an attorney to obtain a POA, then the easiest thing to do is to look for their contact information online and reach out to them. Phone numbers, email addresses, and even live chat are available so that you can get in contact in whichever way is best for you.