The term "power of attorney" can often be heard, but few people probably understand what a POA really means. These legal documents are indeed powerful, and there are actually more than one type of Power of Attorney. You will want to use the correct type, so read on for a summary of the 4 main types and when to use them.
The General Power of Attorney is the most well-known and commonly used of the four. This POA is a general purpose tool to assist those in need of temporary substitute powers. For example, a business owner who plans to be out of the country for a few weeks might appoint a trusted person to act on their behalf for business purposes, such as hiring new employees and minor business decisions.
This form of POA allows the grantor the ability to pick and choose precisely what the agent (the appointed person) can do. People with multiple business concerns use this form of POA to designate specific tasks that may be performed, such as a POA that is used only for real estate transactions, for example. These POA are often set to expire when a certain task has been preformed.
3. Health Care
Not to be confused with a living will, the health care POA covers all medical issues, not just life support decisions. You may, in some states, include specific provisions for life-support concerns in a health care POA. The health care POA is meant to become active when the grantor reaches a state of incapacity, when you are judged by a doctor to be no longer able to make decisions on your own. This power encompasses any medically-related decisions.
The most powerful of the four types of POA, the durable form (also sometimes referred to as a medical POA) combines the health care POA and the General POA. A general POA is only good while the grantor is in full capacity, but the durable type can only be voided by the grantor's death. The purpose of the durable type is to ensure that your financial affairs are taken care of during your incapacity. You can also find these types of POA used for estate planning purposes.
Regardless of the type of POA you use, a consultation with legal services is vital to ensure that you use the form that is best for your situation. When used properly, these types of POA are useful and powerful tools to help you keep your business going and ensure that your affairs are handled no matter what.