How Is a Durable Power of Attorney Different From Other Powers of Attorney?

If you are at all familiar with estate planning, you’ve heard the term “power of attorney.” You may also have heard some of the variations of that term, such as medical power of attorney or durable power of attorney. Each type of power of attorney has its own rules and limitations. Choosing the right one for your needs can be difficult without estate planning guidance. 

Durable Power of Attorney

Giving someone a power of attorney or POA authorizes them to make certain decisions on your behalf if you cannot. Two main types of durable power of attorneys are available. Financial power of attorney gives the person you choose authority to manage your financial affairs. A medical power of attorney gives the person of your choosing the authority to make healthcare decisions for you. 

Some POAs are temporary. For example, you might want to appoint a POA to manage your bank accounts and investments if you plan to be off-grid for an extended period. In this case, the POA would end when you become available again. 

A durable power of attorney means the POA remains in effect if you should become incapacitated. Whether incapacitation is caused by an accident, a medical emergency, or a terminal illness, having a durable POA in place will help you plan for the possibility of a decline in mental function. 

Durable POA vs. Ordinary POA

An ordinary POA expires if you become incapacitated. For example, if you issued a POA to handle business transactions while you were off-grid and you suffered an accident that caused you to become mentally incompetent, that POA would no longer be valid. 

Ordinary POAs can be general, covering a wide range of issues, or specific, limited to only the topics you assign. Some of the powers granted with a POA include:

  • Conducting business transactions
  • Making gifts or donations
  • Making healthcare decisions
  • Selling, buying, or managing real estate
  • Borrowing money
  • Handling insurance claims
  • Filing tax returns
  • Signing checks, paying bills

Only those powers you wish to grant will be included in your power of attorney. POAs include a date or event (such as incapacitation) that deems the document expired. 

Durable POA vs. Healthcare POA

A healthcare POA, or medical proxy, is used in a medical emergency. If you should become unconscious or unable to make your own healthcare choices, a healthcare POA is empowered to make them for you. In most cases, a person appoints a family member to communicate with the medical team on your behalf. 

Healthcare POAs can be temporary or ongoing. In ongoing circumstances, they are referred to as durable health care power of attorney. Assigning a durable healthcare POA will make it easier for your loved one to work with healthcare providers if you have dementia or another healthcare issue that prevents you from making your own decisions.  

Learn More About Durable Powers of Attorney

A power of attorney document can be created to fulfill almost any need. POAs are flexible, allowing you to decide which powers they cover and when they expire. If you should fall ill or become incapacitated without a POA in place, decisions about your health or your estate could be left to the state. 

Think of your durable power of attorney as a designated decision-maker. Who do you trust to make the best decisions on your behalf? Make sure you speak to the person before you draw up documents and name them durable POA. 

For more information about choosing a POA and how POA documents can protect you, your loved ones, and your assets, contact OC Wills and Trusts in Orange County, CA, today.

Brian Chew, the managing partner of OC Wills & Trust Attorneys, has extensive experience in the areas of estate planning, asset protection planning, business succession planning, long-term care planning, and veterans’ benefits. By devoting his practice to estate planning matters, he has founded a firm that strives to provide exceptional service to their clients by working closely with individuals and their families to create comprehensive and customized estate plans. For the past twenty five years, Brian has served thousands of clients in the matters of estate planning, wills and trusts. If you have any questions about this article, you can reach Brian Chew here.