What is a Financial Power of Attorney?
A Financial Power of Attorney is a written document that enables an individual (referred to as the “principal”) to designate another person or persons as her “agent” or “attorney-in-fact,” to act on the principal’s behalf. In other words, a Financial Power of Attorney gives the agent or attorney-in-fact the authority to act in the place of the principal with respect to financial matters. The scope of the power can be very limited (e.g. authority to pay specific bills) or broad (all the legal powers you yourself have). It can also be limited to certain specific situations, such as actions necessary to close the sale of a specifically described parcel of real estate. You can name any friend or family member over age 18 as your attorney-in-fact. Keep in mind, however, that your attorney-in-fact should be someone you trust to manage your financial affairs honestly and competently. If you create a power of attorney for a specific financial transaction, you may choose to name an agent with special experience or particular expertise in handling that type
It is important to distinguish between a “durable” power of attorney and “non-durable” power of attorney. A “durable” power of attorney is a power of attorney that is not terminated by subsequent disability or incapacity of the principal, i.e. the power of attorney continues to be effective after you become incapacitated. At this date, all states have recognized some form of durable power of attorney.
A “non-durable” power of attorney will cease to be effective if you become incapacitated.
What is a Health Care Power of Attorney?
A “Health Care Power of Attorney” is a legal document that allows you to specify who will make health care decisions for you if, for any reason, you cannot make these decisions for yourself. This document has different names in different states, such as a Medical Power of Attorney, Health Care Proxy, Health Care Power of Attorney, Designation of Health Care Surrogate, or Durable Power of Attorney for Health Care. The person you name to make health care decisions on your behalf in an Advance Medical Directive is referred to as your health care agent, advocate, or surrogate.
Frequently, a Health Care Power of Attorney is combined with a Living Will in one single document that is sometimes referred to as a Health Care Directive or Advance Medical Directive.
State laws are very specific about what is required in order to create a valid Health Care Power of Attorney and who can act as the health care agent.