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When caring for a loved one or preparing your own plan for the future, it's important to understand what options are available to you. Keep reading to learn more.
Power of Attorney or POA is a document that gives one person the legal right to oversee and act on behalf of another. POAs can make financial, medical, and property decisions depending on the document's level of authority.
Most often, a power of attorney is used to help make medical decisions if a person cannot make them for themselves. It's also important to note that a POA can be terminated if necessary. There are several types of POAs beyond a traditional durable power of attorney.
When an individual needs help taking care of necessities like bills, investments, taxes, etc., a limited POA allows the caregiver to manage these matters within parameters defined in the order. Limited POAs are always limited in time and authority.
For example, your grandparent is still in good physical health, but they've become more forgetful and can no longer pay bills or handle their finances. A limited POA would give you the ability to make those decisions for them. If they receive treatment or recover their cognitive abilities, the POA would end.
If you need to set up a longer-lasting order, a durable power of attorney may be a better choice. DPOAs can make financial decisions and manage things on behalf of the principal, but they cannot make healthcare decisions like taking the person off of life support or agreeing to therapies, treatments, etc.
You can also choose to set up a healthcare-specific DPOA or a financial DPOA where the agent only makes medical or financial decisions on behalf of the principal. In most cases, it may be beneficial to set up a medical and financial DPOA.
Keeping the two matters separate ensures that the person elected to power of attorney is overwhelmed, and it's also a good idea to avoid putting your eggs in one basket. Having different people serve in a POA role can also work as a system of checks and balances. The medical DPOA can't make decisions that would take excessive funds without the permission of the financial DPOA and vice versa.
The most versatile POA is the general power of attorney. If you're a GPOA, you can perform almost any act on behalf of the person in your care. However, it's important to understand that should the principal pass away or become incapacitated, the power is revoked.
Some states allow you to set up a "springing" power of attorney that becomes active if a specific event occurs. For example, suppose the principal is a military service member. In that case, the springing POA agreement may state that the powers come into effect if the principle is harmed or incapacitated while deployed.
Of course, there are many applications for a springing POA, so always talk to an estate planning lawyer about your options.
Sometimes having too many choices can be worse than having none at all. While it's probably overwhelming to consider the different types of POAs you can establish, speaking to an estate planning attorney can give you peace of mind.
At Dorcey Law Firm, we provide trusted guidance tailored to your specific needs. From the power of attorney documents to creating an overall estate plan, our team can help.
We understand how frustrating it can be to figure out the best plan for you, which is why we work with you to understand your goals, work out a plan, and draft the necessary documents that can give you peace of mind.
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Florida - Southwest