You may be aware of the fact that a power of attorney is a legally binding document that can be used to give another party the ability to act for you. The representative is called the agent or attorney-in-fact, and the person granting the power of attorney is called the principal or the grantor.
There are different types of powers of attorney. There are general powers of attorney, there are also limited powers of attorney.
Sweeping Power
If you create a general power of attorney, you are giving the agent sweeping power. The agent that you name in the document would be allowed to act on your behalf for just about any purpose.
This is a great deal of power to give to someone else. However, there are circumstances that could exist that would call for the creation of a general power of attorney.
Limitations
It is possible to use a limited power of attorney if you do not want to grant the agent total power to act on your behalf. The limits that you impose would be entirely up to you.
For example, let’s say you are in a business that requires you to sign legally binding documents in person on a regular basis, but you will be doing business in Asia for six weeks. You could choose to give a trusted assistant the power to sign these documents while you are gone. This would be the extent of the power; the agent would not be empowered to enter into any other type of legally binding agreements on your behalf.
This is one example, but there are many different types of limitations that could be imposed when you create a limited power of attorney.
Durable Powers of Attorney
We specialize in estate planning and elder law matters. In our area of specialization, durable powers of attorney are often utilized. A standard power of attorney, whether it is general or limited, would no longer be in effect if the agent was to become incapacitated. Durable powers of attorney do remain in effect upon the incapacitation of the grantor, and this is why these devices are used for incapacity planning purposes.
People often execute two different durable powers of attorney to limit the respective agents to certain areas. You could use a durable financial power of attorney naming a financial decision maker, and you could name a health care agent through the creation of a durable power of attorney for health care.
A very significant percentage of seniors become unable to make all of their own decisions at some point in time. If you take the right steps, hand-picked decision-makers will be standing at the ready to act on your behalf in the event of your incapacitation.
To Schedule a Free Consultation
If you are interested in the possibility of working with our firm after learning these facts, please select our “Workshops” tab to RSVP for a free estate planning workshop. At that workshop you will be offered a free one-hour consultation with an attorney: www.collinslawgroup.com/seminars/
