A power of attorney gives an individual, whom you appoint, the right to act on your behalf if you ever become incapacitated and unable to make financial or business decisions yourself. While it is a powerful estate planning instrument, it’s only as strong as you make it. There are four types of powers of attorney. You should choose the one that best suits your needs according to your circumstances.
- Durable – Remains in effect after you become incapacitated, and it also stays in effect until your death unless it is rescinded before your incapacitation.
- General – Grants an individual all the powers that you have. This type of power of attorney may be appropriate if you are not incapacitated but needs someone to act as your representative for business or financial matters. A general power of attorney remains in effect until your incapacitation or death, unless you rescind it before such occurs.
- Limited – Gives an appointee the right to act on your behalf in a limited capacity. It remains in effect until a time specified in the document.
- Springing – Goes into effect once you become incapacitated. With this type of power of attorney, the criteria for determining incapacity must be clearly stated.
