What is the Difference Between Durable Power of Attorney and General Power of Attorney?
If you are developing an estate plan, one of the choices you have is whether to complete a power of attorney document. In the power of attorney, you designate an agent who has the legal authority to act on your behalf if you are unable to do so. It is important to carefully consider who you select as your agent. You may also designate the when the power of attorney becomes effective. What is the difference between durable power of attorney and general power of attorney?
A Power of Attorney allows your affairs to be handled by your designated agent in the event that you become incapacitated and are unable to make decisions for yourself. You typically complete a medical power of attorney and name an agent to make your medical decisions if you are unable to make them yourself. On the other hand, you complete a financial power of attorney to handle your financial affairs. In either event, your agent is required to act in your best interest.
“Durable” and “general” refer to the length of time the Power of Attorney document is effective. A general power of attorney is effective while you, the principal, are alive and of sound mind. If at any time you become incapacitated or die, the legal authority granted to you agent under the general power of attorney terminates. A durable power of attorney does not terminate your agent’s authority upon incapacity; in fact this is usually when agents will begin handling your affairs. A “springing” durable financial power of attorney is effective upon the principal’s disability, while a “standing” financial power of attorney takes effect immediately upon the signing of the document. Both a springing and standing financial power of attorney terminate upon the principal’s death.
Including a power of attorney in your estate plan can be more time and cost effective if you become incapacitated. Your family and friends will likely not need to go through court proceedings to establish a guardianship or conservatorship. Instead, your designated agent can begin making decisions for you. If you are ready to begin your estate plan and create a power or attorney, reach out to Brown Law Firm, LLC. Our lawyers can guide you through the decisions involved. Call us at 303-339-3750 or visit our website to contact us.