Types of Power of Attorney

Imagine this – One minute, you’re driving down the road. The next, you wake up in a hospital bed, lucky to survive the brutal auto accident. You are thankfully alive, but you can’t make decisions for yourself. What happens next?
This is where a power of attorney (POA) is extremely beneficial. A POA is a legal document that lets you designate someone to make decisions on your behalf. This person is often referred to as your “agent”.
Different types of POAs grant different powers to your agent. Here are some of the most common types of POAs so you can see which one is right for you. Note that this is not legal advice – for personalized guidance you should contact an attorney.
• General Power of Attorney
Under a general POA, your agent is authorized to act on your behalf in a variety of situations. While specifics may vary by state, general POAs often allow your agent to make health, financial, legal, and business decisions for you. However, general POAs don’t give the agent total control over your life (ex: they can’t change your will). General POAs can be either durable or non-durable, as explained later in this article.
• Financial Power of Attorney
A financial POA is a narrower type of POA that is more customizable. Unlike a general POA, the financial POA allows you to delegate specific powers of your choice to your agent. For example, you could allow your agent to pay your bills and file your taxes, but not to sell your real estate or withdraw money from your bank account (or vice versa). Like general POAs, financial POAs can either be durable or not-durable.
• Healthcare Power of Attorney
A healthcare (or medical) POA is another narrow, customizable type of POA. With a medical POA, your agent can make decisions about your medical care. This can range from decisions about which doctor to use and what medicines you may take to instructions regarding end-of-life care. One common instruction in a medical POA is to inform doctors that you don’t want to receive certain kinds of life-saving care. Like a financial POA, you can mix and match the powers you want to delegate to your agent and retain for yourself.
Types of POA & Activation
Different types of POAs grant different types of authority to the agent, but there are also different ways that POAs can kick into effect. Three common types of POA are durable, non-durable, and springing, which we will review below.
• Durable POA
Durable POAs take effect when they are executed. Under Durable POAs, the agent is still allowed to act on your behalf if you became incapacitated. While many states presume that POAs are durable, it’s still a good idea to specify this in your POA to avoid confusion. For example, many estate planning POAs are durable, since the decisions are often made when you are incapable of making them.
• Non-Durable POA
Like durable POAs, non-durable POAs take effect upon their creation. However, non-durable POAs are different because they don’t allow your agent to make decisions for you when you are incapacitated. These are useful when you want to allow an agent to make a decision for you in a particular transaction (ex: a real estate deal).
• Springing POA
Unlike most POAs, Springing POAs don’t take effect when they are created. Instead, a Springing POA allows an agent to act on your behalf once a certain condition is met (ex: incapacitated). Springing POAs are a great way to delegate authority while keeping current control over your powers. However, the process to have someone declared incapacitated can cost time and money. Furthermore, it may not be clear if you are incapacitated, especially in the early stages of memory loss.
Broadly speaking, durable POAs cover more situations than a non-durable or springing POA. Likewise, a General POA allocates more authority to the agent than a financial or a healthcare POA does. Each type of POA comes with benefits and drawbacks. For personalized advice, you should contact an attorney.