Giving someone power of attorney is an essential part of your estate planning, as well as something you might use for your business. However, you need to tailor their powers to your needs.
What types of power of attorney are there?
Here are some of the types of power of attorney you can give:
- Springing power of attorney: You give someone authority to act on your behalf once certain conditions that you specify apply. You may use this in case you suffer an accident or mental illness, which leaves you unable to make decisions alone.
- A limited power of attorney: You may use this for a one-off event. When you create it, you limit the powers to just the tasks you need. You might use this to handle a business transaction or property sale when away on vacation.
- Durable power of attorney: This gives someone permission to act on your behalf until you either cancel their power or you die. You can specify the tasks they are allowed to carry out.
- Health care power of attorney: This is the person you ask to make medical decisions on your behalf if you are unable to. They do not need to be a medical expert. Their role is to understand your wishes, make the choices you would make in the circumstances and communicate this to the medical staff.
When giving someone power of attorney, it is essential to seek legal help to do it correctly. Giving someone too much authority could result in problems. So could failing to ensure you have given them enough to carry out all the tasks that may be required. You may wish to give different people different responsibilities, rather than rely on one person alone.