What is a Power of Attorney?

A Power of Attorney is a legal document giving another person (the attorney-in-fact) the right to do certain things for the maker of the Power of Attorney. What those things are depends upon what the Power of Attorney document allows. A person giving a Power of Attorney may make it very broad or may limit the Power of Attorney to certain acts.

When would I use a Limited Power of Attorney?

A “Limited Power of Attorney” gives the attorney-in-fact only certain powers or the right to engage in particular transaction on behalf of the principal. For example, a person might use a Limited Power of Attorney if he or she needed to sell a home in another state and wanted a person to handle the transaction locally. The Limited Power of Attorney would then be limited to selling the home.

Why would I need a General Power of Attorney?

A General Power of Attorney gives the attorney-in-fact very broad powers to do almost every legal act that the principal can do. When attorneys draft general Powers of Attorney, they still list the types of things the attorneys-in-fact may do, but these powers are very broad. People often do general Powers of Attorney to plan ahead for the day when they may not be able to take care of things themselves. By doing the General Power of Attorney, they designate someone who can do these things for them.

What is a Durable Power of Attorney?

Normal Powers of Attorney terminate if and when the principal becomes incompetent. Yet many people do Powers of Attorney for the sole purpose of designating someone else to act for them if they cannot act for themselves. It is precisely when a person can no longer do for themselves that a Power of Attorney is most valuable. To remedy this inconsistency, the law created a Durable Power of Attorney that remains effective even if a person becomes incompetent. The only thing that distinguishes a Durable Power of Attorney from a regular Power of Attorney is special wording that states that the power survives the principal’s incapacity. Most Powers of Attorney done today are durable.

Who can serve as my Power of Attorney?

Any competent person eighteen years of age and older may serve as an attorney-in-fact. Certain financial institutions may also serve. There is no course of education that attorneys-in-fact must complete nor any test that attorneys-in-fact must pass. Because a Power of Attorney is such a potentially powerful document, attorneys-in-fact should be chosen for reliability and trustworthiness.