Power of Attorney vs. Durable Power of Attorney

By Jeffry Olson, J.D.

Power of Attorney vs. Durable Power of Attorney

By Jeffry Olson, J.D.

The term "power of attorney" can mean different things depending on its use and context, which can sometimes create confusion. It is important to understand some of the different categories of power of attorney, the power provided in each, and the way in which a durable power of attorney is different.

Businessman and businesswoman going over documents

Be aware, a power of attorney has nothing to do with being a licensed attorney. Nonattorneys can receive power of attorney, and, conversely, power of attorney does not allow an individual to practice law. Another distinction is that it provides the individual with authority that an attorney at law does not automatically have regarding his or her client.

Each state has its own requirements for drafting and executing a power of attorney. This article is intended to provide general information only.

 

Power of Attorney Basics

In general, a power of attorney is a written document where the individual signing the power of attorney (the principal) authorizes another person (the agent) to act on behalf of the principal in some legal capacity. It provides the agent with power normally reserved for the individual. The principal decides how much and what type of authority to give the agent in the power of attorney document.

The authority given is commonly one of these types:

  • A general power of attorney allows the agent to make decisions for the principal broadly.
  • A specific power of attorney allows the agent to act on behalf of the principal in a limited, specific situation or transaction.
  • A financial power of attorney allows the agent to make decisions regarding the principal's finances.
  • A health care power of attorney allows the agent to make decisions regarding the principal's medical care.

The principal does not give up the authority to manage his or her finances after signing a power of attorney, and the agent does not own any of the principal's property. The intent is to allow the agent to assist the principal, either before or after incapacitation, when the principal is unable to make decisions on his or her own for any number of reasons.

Powers of attorney end at the death of the principal. The agent's authority ends at the time of the principal's death, regardless of the type of power of attorney.

Categories of Power of Attorney

The conventional power of attorney provides the agent authority beginning when the principal executes the document. The authority ends when or if the principal becomes mentally incapacitated, if not ended sooner by the principal.

A durable power of attorney provides authority beginning when the principal executes the document, as with a conventional power of attorney. However, the durable power of attorney remains effective even when the principal is incapacitated. It is still up to the principal to end the durable power of attorney.

A springing power of attorney provides authority beginning when a specified event occurs. This event is often when the principal becomes incapacitated. A springing power of attorney must be carefully drafted to avoid confusion over whether the intended "springing" event has occurred.

Any type of power of attorney can be conventional, durable, springing, or durable and springing. Remember, a conventional power of attorney expires when the principal becomes incapacitated, and a durable power of attorney does not expire upon incapacitation. This distinction can be particularly important when drafting a health care power of attorney. Consider whether it makes sense to use a conventional power of attorney regarding health care.

Selecting an Agent

In addition to considering the type of power of attorney, the principal must carefully consider the selection of the agent. The agent must be someone the principal trusts completely. Common examples include an adult child, a spouse, or a close friend. The geographical location of the parties also frequently plays a role in selecting an agent.

A power of attorney is a useful tool to help a principal manage finances and allow an agent to act on his or her behalf. Consider the reason for the power of attorney before selecting which type to use. Then select a reliable, trusted agent that will be able to fulfill the expected purpose for the power of attorney.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.