November 23, 2020
You’re probably familiar with the general contours of an estate planning document referred to as “power of attorney.” What many estate planners aren’t aware of, however, are the numerous ways you can structure these documents. This blog will explain some common powers of attorney to help you understand which ones you might need for your situation.
Regular, Springing, or Durable
Regardless of the type of power of attorney you are dealing with, you will have to specify the conditions in which your agent can use the powers. Generally, you may choose one of three designations to attach to your power of attorney.
- Regular: The default option is to have your power of attorney grant the agent his or her powers immediately. It will end once you become incapacitated or revoke the authority (or on a specified date).
- Durable: A durable power of attorney does not have a set end date; choose this option if you want your agent to continue acting on your behalf if you become incapacitated.
- Springing: This type of power of attorney only activates once the principal becomes incapacitated. However, some states do not recognize springing powers of attorney.
- General. This form of power of attorney is referred to as “general” because it gives your agent a wide breadth of authority. While many principals wish for their agents to only act on their behalf on real estate, tax, or business matters, an agent for a general power of attorney can be granted authority on all three matters (and more). Essentially, the agent is legally able to do anything you may do. However, you should have a separate health care power of attorney form.
- Financial. A financial power of attorney, depending on which powers you designate for your agent, can look a lot like a general power of attorney. Or, you can limit your agent to handle specific financial matters, like closing on real property or engaging in certain business activities. If you want to limit the scope of authority for your agent, your financial power of attorney will be referred to as “special” or “limited.”
- Health Care. A health care power of attorney grants your agent the authority to make certain decisions related to your medical care when you are incapacitated. One has reached incapacity when he or she is unable to make “responsible decisions concerning his person” as laid out by the Arizona Court of Appeals. You can limit your health care agent to certain aspects of your medical care, or you can give broad authority.
A similar estate planning document is known as a “living Will.” This puts your wishes in writing, rather than having someone make important decisions for you. You may have a living Will (sometimes called an “advance directive”) to supplement an existing health care power of attorney.
This post merely covers some of the most commonly used power of attorney types. There are other types that may be right for you, your loved ones, and your overall circumstances. The one universal truth is that you need to set up your estate plan while you are still able and have capacity. Our firm can make a somewhat uncomfortable process easy, simple, and (almost) stress-free. Give us a call at 623-385-3190 to see how we can resolve the legal issues keeping you up at night.