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Powers of attorney (POA) are an extremely important planning tool that can benefit almost everyone — from 18-year-olds going off to college to the elderly who find themselves in fragile health conditions. However, many people do not have a clear understanding of how they work. That’s why in today’s blog post, we’re discussing POA basics.

A power of attorney is a legal document that you can create in order to grant another person the authority to make decisions on your behalf. When you create a power of attorney, you are called the “principal” and the person you grant decision-making authority to is called the “agent” or “attorney-in-fact.”

There are several different types of powers of attorney. Healthcare powers of attorney allow the agent to make medical decisions on behalf of the principal. General powers of attorney allow the agent to make financial decisions on behalf of the principal. Limited powers of attorney give the principal the opportunity to pick and choose which authorities they grant the agent.

Regular powers of attorney come to an end in one of the following three cases:

• The principal revokes the power of attorney. He or she can do this at any time by tearing it up..
• The expiration date of the power of attorney passes if it is time limited. You can make an expiration date for your power of attorney when you create it, but you do not have to.
• The principal becomes incapacitated without a “durable” power of attorney. For example, he or she may be in a coma or have dementia or Alzheimer’s to such a degree that he or she is no longer cognizant enough to make decisions. 

You may have heard of the phrase “durable” power of attorney. Durability can be added to any of the above types of power of attorney, the primary difference being that durable powers of attorney do not become invalid if the principal becomes incapacitated. Durable powers of attorney can provide peace of mind that your financial affairs and/or healthcare decisions will be handled by someone you trust if anything happens to you. 

Planning for the future is important. Powers of attorney are just one of many tools you can use to ensure that you will be protected in the future or an uncertain time and your wishes will be protected. If you are interested in creating an estate plan that is personalized to your unique situation in life, the VKBAR team is here to help. We encourage you to contact us today so that we can begin your estate planning journey together.