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Different Types of Power of Attorney and Their Rights, Responsibilities, and Limitations

 


Sometimes when you feel like someone you trust can make important decisions better on your behalf, you authorize them to make your decisions providing a power of attorney (POA).

 

But before appointing someone or after getting appointed by someone with a power of attorney, one should have proper and complete knowledge about the rights and responsibilities they are providing or receiving.

 

In this article, we will clarify some of the most common questions people have regarding a power of attorney and discuss the rights, responsibilities, and limitations of each type. Have a look.

 

 

What is a Power of Attorney?

 

Power of attorney is the legal consented documents that allow a person to decide whom they want to act or take their medical, financial, or other important decisions on their behalf when they are not capable of taking them themselves.

 

The person who appoints a power of attorney is called a principal, and the person who gets appointed as a power of attorney is called an agent. Most often, the aging adults tend to appoint a power of attorney they trust the most for their peace of mind and security.

 

It is essential to choose the most trustworthy and reliable person for a power of attorney. Because the POA agent holds immense power and has the capability to change the condition or stability of the principal’s personal and professional life completely.

 

The whole concept and process of POA can be difficult and confusing for both the principal and the agent. Certain sets of rules clarify the rights and responsibilities a principal appoints to an agent via power of attorney. There are certain limitations of a POA as well that an agent must have proper knowledge about.

 

The rights, responsibilities, and limitations of a power of attorney differ with the type of POA provided to the agent.

 

 

Types of Power of Attorney

 

There are various types of power of attorney based on the aspects on which the agent will take actions on behalf of the principal. That can be the medical aspect, financial aspect, property aspect, and so on.

 

But rather than these aspects, the types of POA are also divided based on how long the power will last to the agent. Below, we are pointing out the rights, responsibilities, and limitations of some of the major types of power of attorney.

 

General Power of Attorney

 

It is the general form of power of attorney, which is basically followed when there is no specified aspect for appointing the POA. Here, the agent gets the authority to make all the personal and business decisions on behalf of the principal until the principal becomes mentally incapacitated.

 

Rights

 

  • Making all personal and financial decisions of the principal

  • Access to safety deposits

  • Conducting bank transactions.

 

Responsibilities

 

  • Purchasing or selling real estate

  • Purchasing life insurance

  • Handling bank accounts

  • Handling government benefit issues

  • Filing federal tax returns

  • Making transfers to irrevocable trusts.

 

Limitations

 

  • It can only be filed when the principal is in sound mind

  • Agent can’t change the principal’s will

  • Agent can’t change or transfer the POA to someone else

  • Lasts until the principal becomes mentally incapacitated

  • Ends with the death of the principal.

 

Special Power of Attorney

 

Special power of attorney, also termed as a limited power of attorney, provides a very limited range of powers under restricted circumstances to the POA agent. The agent gets only the power to act on a highly specific affair, such as selling a property or handling business transactions on behalf of the principal.

 

Rights

 

  • Handling only the specific task appointed.

 

Responsibilities

 

  • Act for only one or a few particular event/s

  • Selling the principal’s personal property

  • Managing real estate

  • Collecting debts

  • Handling business transactions.

 

Limitations

 

  • It can only be filed when the principal is in sound mind

  • Agent can’t change the principal’s will

  • Agent can’t change or transfer the POA to someone else

  • Ends with the end of the event/s.

 

Healthcare Power of Attorney

 

A healthcare POA is responsible for making all the crucial medical decisions of the principal. It starts from which doctor the principal will consult to which treatment and diet they will follow.

 

Rights

 

  • Deciding the diet of the principal

  • Deciding whether the principal will have home treatment or hospital supervision

  • Able to utilize the full budget for the treatment of the principal.

 

Responsibilities

 

  • Managing the medical care the principal receives

  • Selecting the best-suited doctor for the principal’s treatment

  • Looking after the required nursing factors and resources

  • Keeping records of the medicines and medical expenses.

 

Limitations

 

  • It can only be filed when the principal is in sound mind

  • Agent can’t change the principal’s will

  • Agent can’t change or transfer the POA to someone else

  • Agent can’t decide if the principal is capable of making his own decisions

  • Ends with the principal’s death.

 

Financial Power of Attorney

 

The financial POA is assigned for making all the financial and business decisions and actions on behalf of the principal.

 

Rights

 

  • Access to the principal’s financial accounts

  • Making investment decisions.

 

Responsibilities

 

  • Paying for principal’s healthcare, housing, and other bills

  • Filing taxes

  • Collecting debts

  • Managing the personal or professional properties

  • Applying for public benefits for the principal.


Limitations:

 

  • It can only be filed when the principal is in sound mind

  • Agent can’t change the principal’s will

  • Agent can’t change or transfer the POA to someone else

  • Lasts until the principal becomes mentally incapacitated

  • Ends with the principal’s death.

 

Durable Power of Attorney

 

A durable power of attorney refers to the POA where the agent will have the authority to act on behalf of the principal even when the principal is incapacitated.

 

Rights

 

  • Can either act on behalf of the principal when the principal is conscious but will continue even after they become incapacitated

  • Or can act just after the principal becomes incapacitated like a healthcare POA.

 

Responsibilities

 

  • Any task or activity for any aspect the principal desires

  • It can be one specific aspect or multiple aspects.

 

Limitations

 

  • It can only be filed when the principal is in sound mind

  • Agent can’t change the principal’s will

  • Agent can’t change or transfer the POA to someone else

  • Agent can’t decide when to activate the POA from

  • Agent can’t set the aspects for the POA

  • Ends with the principal’s death.

 

 

FAQ

 

  • What is the Eligibility for Getting or Giving Power of Attorney?

 

Anyone who is mentally sound and is at least 18 years old is eligible for both giving or having a power of attorney.

 

  • Can You Appoint Multiple Powers of Attorney?

 

Yes, you can appoint multiple powers of attorney under certain circumstances. You can appoint multiple POAs for the same or different aspects.

 

  • Do You Need a Lawyer to Prepare a Power of Attorney?

 

It is not mandatory to have a lawyer to prepare a power of attorney. But it is better to consult with a good attorney for better advice and understanding of the powers before handing them to the agent. It’s better to take help from a known or family attorney in this regard.

 

  • Can a Power of Attorney be Cancelled?

 

Yes, a principal can revoke the power of attorney whenever they want. But they must give a legally signed notice to the agent and record it properly.

 

 

Final Words

 

It is very important to take time and understand the whole process and concept of a power of attorney before providing it to someone because this is a huge power and responsibility to put upon one’s shoulder.

 

Hence, it is better to appoint someone who’s most reliable and obedient to you, preferably one of your family members. Make your move wisely.


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