Simply put, there are many types of powers of attorney. With this in mind, it’s imperative that you know what type of legal document you can create as you go through the estate planning process.
If you believe there is only one type of power of attorney, if you don’t take the time to learn more about your other options, you’ll soon realize that you need to double back and make some changes.
With the help of your estate planning attorney, sit down and learn more about the many types of powers of attorney. This is the only way to make an informed decision as to which type will give you and your family what you need.
Here are some of your many options:
1. General Power of Attorney
In short, this is a power of attorney that permits the agent to conduct almost every type of financial and business transaction on your behalf.
Since you are handing over so much power, it’s imperative that you choose an agent you can trust. Furthermore, you should have a system in place for ensuring that your agent is following your wishes and not making decisions that are in their best interest.
2. Limited Power of Attorney
This is one of the more common types of power of attorney, with this created to give an agent the ability to perform a specific task.
For example, you can use a limited power of attorney to give an agent permission to conduct a specific financial transaction. However, if it has anything to do with other areas of your life, the person has no control.
Note: as you create a limited power of attorney, make it clear as to the agent’s authority. You don’t want there to be any gray area.
3. Springing Power of Attorney
Did you know that you can create a power of attorney to go into effect only if a particular event occurs? This is known as a springing power of attorney.
The triggering event can be anything you think up, such as reaching a certain age or a particular date. It can also be something as specific as if you are considered incapacitated by a medical professional.
If you’re creating a springing power of attorney, be clear as to the event that will give the agent the ability to make decisions on your behalf.
4. Durable Power of Attorney
With a general power of attorney, for example, an agent’s authority comes to an end if you become mentally incapacitated. The only exception is if the document is created to say otherwise.
With a durable power of attorney, however, it remains in effect even if you become mentally incapacitated.
Many people opt for this type of power of attorney as it gives them peace of mind of knowing that a trusted person will care for their affairs if they’re unable to do so.
5. Medical Power of Attorney
Who will make medical decisions on your behalf if you are incapacitated? This is a major concern of many people, especially those who are older or have seen a loved one go through this in the past.
With a medical power of attorney, you can name an agent to make key healthcare decisions on your behalf.
Once again, this is a giant responsibility, so you need to choose an agent who will only act in your best interest.
With so many different types of powers of attorney, you may not know where to start. You may not realize what type of document is best for you and your family.
This is why you need to consult with an Indianapolis estate planning attorney at Frank & Kraft, Attorneys at Law. At our law firm, we’ve helped many people better understand each type of power of attorney.
Once you know what’s available to you, we sit down to determine which type is best and how to move forward.
If you require any assistance, don’t hesitate to contact us or call today at (317) 684-1100. We are here to answer your questions, point you in the right direction, and ensure that you don’t make any mistakes.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.