3 Types of Powers of Attorney

Paul Konrardy06/14/201902,027 views

Do you know what a power of attorney (POA) is? Or how many different types there are? Or when you need which one—and why?

The following are three types of powers of attorney you may need, with information from LegalZoom, American Bar Association, Justia, Nolo, FindLaw and Investopedia.

WHN TIP – Talk to Your Legal Adviser: Consult with your attorney because each state has its own rules and regulations regarding the various types of powers of attorney and the forms required.

What are three common POAs?

Power of Attorney – A power of attorney (POA) is a legal document that gives one or more persons (your agent or attorney-in-fact) to act on your behalf if you are unable to do so yourself. It can cover all matters or be limited to specific areas (finances or healthcare, for example). A durable power of attorney remains valid until you either die or revoke the document.
Power of Attorney for Finances (Financial Power of Attorney or Power of Attorney of Property) – A financial power of attorney enables the person you choose (your agent or attorney-in-fact) to handle some or all of your financial matters. The POA for finances can also be limited to a specific financial transaction—for example, for a specific real estate transaction.
Healthcare Power of Attorney (HCPA) (Power of Attorney for Healthcare Decisions or Health Care Proxy) – An HCPA enables the person you choose to make decisions regarding your healthcare and medical treatment if you are unable to do so. (Note: Check with your legal advisor since some states require state-specific forms.)

You can choose a durable power of attorney that continues even once you become unable to act on your own behalf due to incapacity, until you either die or revoke the document. (Check with your legal advisor if your state permits this type of document.)

WHN Expert TIP: According to the American Bar Association website, you should periodically meet with your legal advisor to review your power of attorney documents to determine if anything needs changed, if your agent choice is still the right one for you and/or if there have been any changes in state laws that can affect the document.

When does a Power of Attorney end?

A typical always ends upon the death of the principal. POAs can also end in the following circumstances:

If you become incapacitated and your POA isn’t a durable power of attorney
If you revoke it
If the court invalidates it
If the person you appointed (the agent or attorney-in-fact) can no longer serve
In some states, if your agent is your spouse, and the marriage ends due to divorce

Are there different state rules?

Some state laws can affect your POA. Start here with State Laws for Estate Planning from Findlaw.com. Then consult with your own legal advisor to ensure your POA is properly prepared to meet your state’s requirement.