Elders often think about managing their finances. You will want to help your elderly parents to manage their finances in the best possible way. You have to ensure that your wishes are being fulfilled in case they become incapacitated. To do so, you need a legal document which is called a power of attorney.
If someone grants you a power of attorney, you become an agent or power-of-agent. You can talk to your loved ones about drafting a power of attorney. An estate planning law firm always assists you draft a power of attorney for the proper management of your assets.
The specific powers provided in a power of attorney will depend on the terms of the document. You need to catch the difference between a power of attorney and a durable power of attorney to know which one to choose.
Different Types Of POA
A power of attorney can be of different types. It can be a special, general or medical power of attorney. If you get a general power of attorney, you will have the legal right to manage someone’s affairs. It can include filing taxes and paying bills. A general power of attorney is designed to enable the agent to get access to a lot of powers. You do not have to predict legal scenarios in advance when you give a general power of attorney to someone.
A special power of attorney gives a person access to a limited number of rights. You will have to outline all the authorities that you grant to your agent in a special power of attorney. You will allow the agent to exert control over a few specific issues. It might be related to business decisions or dealing with tax returns. On the other hand, a healthcare power of attorney is specifically used in case of medical emergencies.
General Power Of Attorney
Your parents can appoint you as an agent with the help of a general power of attorney. Your duties as an agent will expire if your parents become incapacitated. Your role will be to provide support and guidance to your parents as long as they are mentally and physically stable.
You can purchase insurance policies for your parents. It is also possible for you to appoint professionals to provide medical assistance. A legal aid attorney will tell you that you can manage real estate and finances when you have a general power of attorney. You will also be allowed to make gifts out of trusts and operate any business. If you want, you can also settle financial or legal claims with a general power of attorney.
Durable Power Of Attorney
If your parents give you durable power of attorney, you will have the ability to act on their behalf. You will gain the agency to care for your parents. Your duties will continue even if your parents suddenly become incapacitated from an illness or injury. You will be responsible for their care as long as they are alive.
If you become a durable power of the agent, you will be able to sign the legal documents of your parents. You can advise them regarding healthcare decisions. You can also make business and financial decisions on behalf of your parents.
Differences Between The Two
Your parents need to understand the difference between a general power of attorney and durable power of attorney before deciding which one to choose. A general POA will no longer be effective as soon as your parents become incapacitated. This means that your responsibilities end there, and you will not be able to deal with their affairs anymore.
But a durable power of attorney stays effective even if your parents become incapacitated. A durable power of attorney will be effective in the case of medical emergencies. You will be able to make medical decisions on behalf of your parents when they are unable to do so themselves. Even if they have high chances of recovery, you still can make decisions on their behalf.
Should A Power Of Attorney Need To Be Filed In A Court?
A Power of Attorney is not required to be filed inside a court. But a power of attorney is often related to asset protection planning. So, you will want it to be safe and secured. It is also better to talk to estate planning attorneys to ensure that you are providing all the right documents and taking the appropriate steps.
The Bottom Line
A durable power of attorney has more benefits than a general power of attorney. But you can still seek advice from law consultation firms before choosing what to do. Whether you want to make a general power of attorney or durable power of attorney will depend on you and your family.