5 Types of Powers of Attorne (POA) That Every Caregiver Should Know About

A power of attorney, also referred to as the POA, is a document that allows one (usually a principal) to appoint another person (agent or in-fact-attorney), to take charge of the personal affairs should the principal be unable to take up the duties and responsibilities. The agent or attorney-in-fact, therefore, should always operate in the best interest of the principal.

Who Can Be an Agent or Attorney-In-Fact?

In most cases, a power of attorney is a document that binds two parties although it is not limited to only two people. A principal can choose to have an agent and a co-agent to work in their interest and carry out the affairs delegated to them.

In cases where the principal decides to appoint two agents, there is a need to set out terms of resolving disputes to avoid dreadlocks if they disagree. Attorney-in-fact or the agent does not have to be practicing or attorney of the law: anyone can be an attorney in fact since it all depends on the principal’s choice.

What Are the Duties of an Agent?

The duties of an agent or attorney-in-fact, should always be well documented in the power of attorney itself. Caregivers can manage both the health care and financial affairs depending on the agreement between the parties.

While carrying out the principal’s duties and responsibilities, it is important that the agents act in the best interest of the principal to avoid any legal ramifications. Some of the common duties and responsibilities of an agent include managing the principal’s finances, taking care of the medical and health care needs, guardianship, assisting with household chores, and any other daily activities.

Healthcare duties may include things like giving consent or withholding treatments and/or diagnosis. In some instances, the agent may also be in charge of the principal’s will and ensure that it is effectively executed.

Legal Requirements

In most instances, a power of attorney takes effect when the principal is still alive but it can also be operative upon the principal’s death or upon the fulfillment of a particular condition.

Moreover, the legal duties of an agent may be either general or limited and may further require both the agent and the principal to meet certain legal requirements.

For instance, if the agent is in charge of all the duties and responsibilities of the principal, the principal needs to meet the legal requirement for incapacity.  Some of these regulations are found under the guardianship law which vary from state to state.

The question of whether a power of attorney needs to be oral or written depends on jurisdiction. Although some jurisdictions do allow oral power of attorney, some do not (and in some cases, like in New York, you may even need to visit notary for that).

Before coming up with a power of attorney, it is important to understand the legal boundaries and consult with a legal expert or a lawyer to make sure you are on the safe side of the law.

The last legal requirement before coming up with the power of attorney is the requirement of witnesses. Certain legal agreements are not effective when there are no witnesses present because of the possibility of coercion and manipulation. The presence of witnesses indicates that the decision was based on consent and free will.

5 Types of the Powers of Attorney

Depending on the duties that are delegated by the principal, there are different types of powers of the attorney in use.  The principal has the right to make decisions, consent or decline to consent to matters that affect them unless there is proof of mental incapacitation. Either way the agent needs to act in the principals best interest.

Before crafting a power of attorney, it is vital to carry out a background assessment of the principal’s needs and interests so that the agent does not end up making decisions that may cause conflict or misunderstandings.

1. Medical Power of Attorney

In the case of caregivers, the medical powers of attorney are the most common ones. This document grants the agent authority to make critical and essential medical decisions for the principal should they not be in a position to do so or should they be incapacitated.

A medical power of attorney becomes effective upon the consent of the presiding physician. Still, the principals wishes and interests should be taken into account as much as possible to avoid possible conflicts. If the physician and principal disagree on the treatment options the final decision lies with the principal unless he/she is legally incapacitated.

2. Non- Durable Power of Attorney

A non- durable power of the attorney is an example of a power of attorney that is limited. It is usually prepared only for a specific period and for particular duties.

It grants the agent a duty to perform a specific transaction such as accessing the bank accounts of the principal and/or paying certain bills. The power is normally operative as long as the principal is not incapacitated.

3. Durable Power of Attorney

Unlike the non-durable power of attorney discussed above, this POA is more encompassing. It gives the agent the authority to manage all the principal’s affairs in case the principal cannot commit to them themselves. There is, therefore, no set period in which this POA operates and it becomes effective upon the principal’s incapacitation. The rules on the effectiveness of the power of the durable power of attorney depend on state laws and the language used in the documents.

Some documents may state that the durable power of attorney becomes effective upon signing, while others may stipulate that the document becomes effective only when the principal becomes incapacitated. This kind of legal agreement is often used in cases where the principal suffers from dementia or Alzheimers and becomes unable to take care of their finances, medication or other aspects of their life.

4. Limited or Special Power of Attorney

This document works on a limited basis, meaning that it is only applicable for the duties that have been clearly stated in writing. It can, for instance, be made when the principal is unable to perform certain duties because of commitments or illness. Since it is limited, the agent cannot perform duties beyond what is in the document.

Moreover, the document should be clear on the types of duties that are delegated to the agent. Should the agent be required to perform a task outside what is stipulated in the document, then both the principal and the agent need to prepare another document.

Limited or special POA is only used when the principal is alive and able to make sound decisions. In case the principal becomes incapacitated or in the event of death, its powers are no longer valid. The document can also cease to be effective upon the completion of the duties. Some of the duties that can be delegated in a limited or special power of attorney  include (but are not limited to) managing mailboxes, paying utility bills, cashing checks, managing investments, and depositing money.

5. Springing Power of Attorney

Springing power of attorney also operates in a limited manner. The agent is only allowed to spring into action and manage the affairs that are assigned by the principal upon the satisfaction of the conditions outlined in the documents such as dates or events.

Springing power of attorney can therefore either be durable or non-durable depending on the terms upon which it is crafted. For instance, if the condition listed in the document is mental incapacitation, then the document cannot take effect when the principal is not mentally incapacitated.

Since the springing power of attorney does not become effective immediately after it is crafted, the agent is limited in the actions that can be taken on behalf of the principal.

Is This a Form of Contract?

Power of an attorney is a binding contract between the agent and the principal. There are therefore certain terms and conditions that have to be fulfilled. Moreover, the basic elements of a contract must be present, otherwise the power of attorney will be considered void. In situations where the principal is not mentally incapacitated, then consent is required before proceeding with the crafting of the document.

As the signing of the POA is often emotionally difficult for the principal (even though they may know that it is the only option) this contract should not be entered into hastily or in a rush. Take time to explain and go through all the aspects of the agreement so that the person in care trusts your judgement and knows that you will act in their best interest. Coercion, manipulation, and duress are all grounds upon which the powers of attorney can be terminated.

Lastly, when crafting a power of attorney, it is essential to pay attention to every detail and use a language that is comprehensible, simple and straight to the point to avoid any misunderstanding, conflict or even legal ramifications.