In your succession plan, a general and specific power of attorney serve distinct purposes. Discover what they do and how they vary from one another.
Not all powers of attorney are created equal. In this article, we’ll go over what a power of attorney is, the difference between a special and general power of attorney, and whether you can make either power of attorney “durable.” Because everyone’s needs are different when it comes to estate planning, it’s important to understand these legal documents and forms and how to use them to create the plan that’s right for you.
Table of Contents
What exactly is a power of attorney?
Before we get into the differences between a general and a specific power of attorney, let’s define what a power of attorney is.
A power of attorney is a formal instrument used in succession preparation that allows another person, known as an agent, to act on behalf of the person who established the power of attorney, known as the principal, in the event that the principal is unable to make those decisions himself or herself.
It is essential to remember that a power of attorney can be used for purposes other than succession preparation. These will not be covered in this book.
What is the distinction between a general power of attorney and a specific power of attorney?
A general power of attorney grants the person wide authority. The representative may be able to make medicinal or judicial judgments, as well as money or commercial decisions.
A unique power of attorney limits the agent’s options. You can even create multiple POAs, each with a separate representative.
For example, you could grant your partner a limited power of attorney to make medical choices on your behalf. Another POA could be created that allows a business associate to use specific assets to care for your company if you become disabled.
In other terms, you can be more precise with special powers of attorney.
What exactly is a “durable” power of attorney?
In succession preparation, it’s often a good idea to make your power of attorney “durable,” which means that it will be useful even if you become disabled. This is also known as a lasting power of attorney.
Is a Power of Attorney still valid after someone dies?
No. When you establish a Power of Attorney, you designate someone to make choices for you if you are unable to do so yourself. These are usually choices about your heath or money. If you die, other succession preparation papers, such as a Last Will and Testament or a Trust, take priority.
Is it possible to make both special and standard powers of attorney durable?
Yes. Furthermore, if desired, you can construct a rising POA that only takes effect if you are disabled.
