Understanding the Different Types of Power of Attorney
A power of attorney (POA) is a written authorization that gives an individual(s) the right to represent or act on behalf of another party in private affairs, business, financial decisions, and several other legal matters. When drawing up an estate plan or last will and testament, it is important to designate a trustworthy person to manage your affairs in order to ensure he or she acts in good faith when handling the money and assets of the person who gave power, also referred to as the principal. This is not a decision that should be made lightly, as the person holding power must be trusted to do their best to serve the principal’s interests, rather than their own personal interests.
In the state of Oklahoma, the Uniform Durable Power of Attorney Act states that an individual may give the principal either complete or limited authority over certain health care and financial decisions. In some cases, the court may be asked to look into the way the person authorized by the POA document has handled the principal’s affairs. It should be noted that not all POAs are created equally, meaning each type will give your attorney-in-fact (the person who will be making decisions on your behalf) a varying level of control. As Oklahoma family attorneys, we understand what a big decision this is and how overwhelming it may be. Because of this, we will do our best to explain the ins and outs of each different type of POA to you and offer our legal guidance to ensure you choose the option that best fits your needs.
Different Types of POA
There are several different types of POA, all of which serve different purposes. If you have any questions about the information below, please feel free to contact our Oklahoma law firm. Here is a brief look at each type of POA:
- General Power of Attorney
This type of POA gives broad powers to an individual or organization to act on your behalf on the following:
- Handling all financial and business transactions
- Buying life insurance
- Settling claims
- Operating business interests
- Making gifts
- Employing professional help
This type of POA is designed for those who will be out of the country and need a trusted individual to handle certain matters, or for those who are physically or mentally incapable of handling their own affairs. A general power of attorney is oftentimes included in an estate plan in order to ensure someone has been appointed to handle financial matters and decisions.
Special Power of Attorney
A special power of attorney is ideal for those wanting to specify exactly what powers an agent may exercise. This is typically used when an individual is unable to handle certain affairs due to health reasons or other commitments.
Health Care Power of Attorney
When this POA document is drawn up, an agent authority is given the power to make medical decisions for you, should you become mentally incompetent or otherwise unable to make decisions regarding your health on your own. It is important to note that, while different than a living will, some states will allow you to combine aspects of the health care POA and living will in order to create a more encompassing health care directive.
Durable Power of Attorney
Finally, a durable power of attorney is a safeguard that will keep the current POA in effect, should you become incompetent due to illness or injury while your POA is in effect. This type of POA is basically a general, special, or health care POA that has a durability provision written into it in order to keep the POA in effect.