Most people who have never had any experience with estate planning or caring for a sick loved one do not realize that there are multiple types of powers of attorney. Each has its own purpose and rules regarding when it goes into effect, what powers it gives the agent, and when or if it can be revoked.
The most common and well-known type is a durable power of attorney. In layman’s terms, this form is when one person gives another person power to make decisions for them. The person granting the power is known as the “principal” and the person receiving the power is the “agent.” Decision-making powers include, but are not limited to, medical and financial decisions. It is irrevocable and its powers will continue even when the principal becomes incapacitated. Therefore, it is very important that a person use extreme care and caution when choosing an appointed agent.
Another variant is the durable power of attorney with springing powers. Its purpose is the same as described above. However, this type does not go into effect until the principal becomes incapacitated. In other words, it “springs” into action. As long as the principal is able, they will keep the powers and continue to make their own decisions. Other types include a financial power of attorney, which only applies to financial matters, or a childcare POA, which applies to the care of children in the absence of the principal.
Consult with an estate planning attorney to determine what type of power of attorney will best fit your unique situation. There are likely options that you are not even aware of.