Powers of attorney are used throughout the legal field for various different reasons. There are different types of powers of attorney, and you should understand the distinctions so that you can make informed decisions.
With this in mind, let’s look at the difference between general and limited powers of attorney.
General Power of Attorney
With a power of attorney, the person who is bestowing the power is called the principal or grantor. The grantor names an agent or attorney-in-fact in the document. The attorney-in-fact can act on behalf of the grantor in a legally binding manner.
A general power of attorney would give the agent a great deal of latitude. For the most part, the agent could enter into any legal agreement that the grantor can enter into on his or her own.
Without question, this is a great deal of power to give to another person. If you want to grant a general power of attorney, you should certainly be discerning when you are selecting an agent.
Limited Power of Attorney
To a large extent, a limited power of attorney is somewhat self-explanatory. With this document you are giving the agent limited power to act on your behalf.
The limits are entirely up to you. For example, you may need someone in your organization to be able to sign certain types of documents on your behalf.
You could alternately give someone general power for a limited period of time. A limited power of attorney can also give the agent the power to act on your behalf for a single transaction.
Durable Power of Attorney
We limit our practice to estate planning and elder law. In our field, incapacity planning is very important, because a significant percentage of senior citizens become unable to handle all of their own affairs at some point in time.
Who would make decisions on your behalf if you become incapacitated? If you do nothing, the state could appoint a conservator to manage your affairs, and the decision would be out of your hands.
You can make sure that your own hand-picked decision-makers are in place through the creation of durable powers of attorney. Because the power is durable, it would remain in effect even if you become incapacitated.
We are using the plural because people typically execute two different durable powers of attorney: one for health care decision-making, and another for financial matters.
Incapacity Planning Consultation
You should certainly prepare for possible incapacity late in your life. If you are ready to take action, our firm can help.
We offer consultations to people in the greater Sacramento area. To set up an appointment, simply call our office.
Latest posts by Timothy P. Murphy (see all)
- Important Estate Planning Tools for the LGBTQ Community - December 11, 2019
- Don’t Accidently Disinherit Your Children - December 9, 2019
- Your Estate Plan: Get It Into a Writing or Else - December 7, 2019