The Difference Between Durable Power of Attorney and General Power of Attorney
As we age, planning for our assets, our health, and our end-of-life care becomes increasingly important. Part of this preparation may include planning for incapacity and requiring someone else to make important decisions regarding our health or assets. One way to handle this is through appointing a power of attorney. This designation can be beneficial as it is legal action with the ability to allocate decision-making authority to another individual. The person granted this power can pay bills, execute documents, make medical decisions, or manage property, depending on the scope of authority given. There are several types of power of attorney designations, including a general power of attorney and a durable power of attorney. There are important differences between the two that should be considered when deciding on what type is right for your situation.
In general, a power of attorney is a legal document that allocates the right to make certain decisions on another’s behalf. It is an important document that appoints an “agent” or “attorney-in-fact.” The grantor still retains the right to make decisions on their own. A power of attorney can be limited in scope to make either financial or health care decisions on the individual’s behalf.
General Power of Attorney
Granting someone general power of attorney essentially gives that person the same rights the grantor has, with some exceptions. This will allow the attorney-in-fact to have the ability to sign documents, make financial transactions, and pay bills on behalf of the grantor. A general power of attorney can be a good choice in situations where the grantor is not incapacitated but needs help making financial decisions and looking over their assets. This designation ends upon the death or incapacitation of the grantor. Because the power lapses upon incapacity of the grantor, this power of attorney may not be able to follow us throughout our life as our ability declines. Under a general power of attorney, a combination of both medical and financial decisions may be designated to the attorney-in-fact. The name Attorney-in-Fact refers to anyone we grant the power of attorney to. This is often a family member or trusted friend rather than someone who is licensed to practice law.
Durable Power of Attorney
Granting someone durable power of attorney duties essentially gives that person the same rights the grantor has, with some exceptions. This designation is maintained even if the grantor is incapacitated, which means the durable power of attorney continues to make decisions after the grantor can longer do so. A durable power of attorney remains in effect until the grantor dies. The purpose of a durable power of attorney is to plan for medical emergencies, cognitive decline later in life, or other situations where we are no longer capable of making decisions. If a durable power of attorney is not in place at the time of incapacitation, the state decides who looks after the prospective grantor’s assets and health through a conservatorship or guardianship, which is granted through a court proceeding. There are two types of durable power of attorney designations: Medical and financial. These designations will allow the attorney-in-fact to make decisions on each respective topic, depending on how the document is written. For instance, a durable power of attorney for medical will make decisions on the grantor’s healthcare.
Under both designations, the grantor can revoke the power of attorney at any time that they have capacity to do so.
While it may seem confusing, there are reasons for the different types of designations. For instance, you may prefer that a spouse has the power to make your healthcare decisions while not making financial decisions. There may be someone more qualified to take care of your assets. The different designations make this possible.
Contact The Mattar Firm
Deciding on which designation is right can be difficult. It is important to think through the process and choose the right attorney-in-fact for the need. This should be someone who can be trusted implicitly to carry out the grantor’s wishes. To that end, an experienced estate planning attorney, like those at The Mattar Firm, can help guide the grantor to the options that may work best for them and their family. Call today for your free consultation. (239) 222-2222