Power Of Attorney: Definitions And Guidelines

A Power of Attorney is a document that allows you to appoint a person or organization to manage your financial affairs and some legal matters in the occasion that you become unable to do so. A Power of Attorney ensures that you have a caretaker when you are least equipped to manage your affairs.

Not all Powers of Attorney are the same, each type gives a different scope of authority to your attorney (the person that you appoint to manage your affairs) or when it becomes active.

General Power of Attorney

A General Power of Attorney gives broad powers to the appointed attorney to act on your behalf, such as financial and business transactions, buying life insurance, settling claims, operating business interests, making gifts and employing professional help when needed.

Limited Power of Attorney

A Limited Power of Attorney gives specific responsibilities to an attorney in the occasion when you cannot handle certain affairs due to commitments or health reasons. Limited Powers of Attorney can give specific responsibilities such as paying bills, managing property or finance and can be assigned to individuals depending on specialization. This is beneficial for when clients have specific preferences in who can manage what aspect of their affairs, such as business partners for handling business transactions and family members for, selling property, managing real estate, and collecting debts, renewing or making payments on existing loans or make charitable donations

Enduring Power of Attorney

An Enduring Power of Attorney is someone that continues beyond the loss of capacity and is not revoked by operation of law. Both General and Limited Powers of Attorney can be an Enduring Power of Attorney.

Differences Between a Representation Agreement and a Power of Attorney

A Representation Agreement is like a Power of Attorney but for health care decision making

Representation Agreement gives a representative the power to make decisions regarding health and personal matters (ex. Hearing aids etc.) whereas the Power of Attorney gives authority to make decisions regarding legal and financial matters. Representation Agreement might give authority for “routine financial affairs” but it is significantly more limited than a Power of Attorney and could not be used to sell real estate on behalf of the client. The Representation Agreement is for making sure someone will make the health care decisions you want when you no longer can.

Appointing a Power of Attorney is a significant step in an estate planning process. To avoid undue stress and expense in the occasion that you are incapable of managing your affairs, or if you need help it is always beneficial to appoint a Power of Attorney sooner than later. Book an appointment with one of our lawyers today to get started!