Generally speaking, power of attorney (POA) is a legal document whereby you give someone else the authority to act on your behalf.
There are 4 primary types of Power of Attorney (POA)
- Limited Power of Attorney
- General Power of Attorney
- Durable Power of Attorney
- Springing Power of Attorney
Limited Power of Attorney
A limited power of attorney is, as the name suggests, a power of attorney with a very specific role. For instance, if a person needs to sign a business document, but is out of the country, he/she can obtain a limited power of attorney that authorizes a business partner to sign on his/her behalf. Once the document is signed, the power of attorney is no longer valid.
General Power of Attorney
A general power of attorney gives a person all the rights that you have for yourself, but only if you are not incapacitated. For example, a general power of attorney may:
- Sign documents on your behalf
- Conduct financial transactions on your behalf
- Pay your bills
A general power of attorney stops upon your death or if you become incapacitated. General power of attorney may also be rescinded at any time prior to death or incapacitation.
Durable Power of Attorney
The primary difference between a general power of an attorney and a durable power of attorney is that a durable power of attorney can remain in effect if you become incapacitated.
In the event you become incapacitated but do not have a durable power of attorney, no one can represent you. A court may then appoint a guardian or conservator who can represent your interests. A durable power of attorney will end upon your death unless it was previously rescinded.
Springing Power of Attorney
A springing power of attorney is similar to a durable power of attorney with one major exception. Although a springing power of attorney can act on your behalf if you become incapacitated, it does not become effective until you become incapacitated.
For this reason, it is essential that the SPOA document clearly stipulates what exactly constitutes incapacitation.