A common question I receive from clients as a Tallahassee Estate Planning Lawyer is: "What is the difference between a general power of attorney and a durable power of attorney?"
Defining Power of Attorney
Before delving into the differences, it's essential to understand what a power of attorney (POA) is. In its simplest form, a POA is a legal document that allows one person (the principal) to appoint another person or entity (the agent or attorney-in-fact) to manage their affairs if they cannot do so themselves, including managing financial transactions, making health care decisions, or handling business operations.
General Power of Attorney
A general power of attorney grants broad powers to the agent to handle a wide array of the principal's affairs. This type of POA is typically used when the principal needs an agent to manage their financial affairs or when they will be out of the country and need someone to handle certain matters in their absence. The key characteristics of a general power of attorney include:
- Scope: It grants the agent authority to perform almost any act the principal could, such as opening financial accounts, managing personal finances, or buying and selling property.
- Non-Durability: A general power of attorney typically ceases to be effective if the principal becomes mentally incapacitated. This non-durability makes it less suitable for long-term estate planning where the potential for future incapacity is a concern.
Durable Power of Attorney
A durable power of attorney operates similarly to a general power of attorney regarding the breadth of powers granted to the agent. However, it includes a crucial provision that maintains its validity even if the principal becomes mentally incapacitated. Here are the defining features of a durable power of attorney:
- Durability: The most distinctive feature of a durable power of attorney is that it remains effective after the principal has become incapacitated. It must be explicitly stated in the POA document, typically with the wording "This power of attorney shall not be affected by subsequent incapacity of the principal."
- Purpose: It is beneficial for long-term planning, providing peace of mind that the principal's affairs will be managed according to their wishes, even if they lose the ability to make decisions themselves.
Key Differences
The primary difference between a general power of attorney and a durable power of attorney lies in their durability:
- Effectiveness Upon Incapacity: A general power of attorney becomes invalid if the principal becomes incapacitated. In contrast, a durable power of attorney is specifically designed to survive the incapacity of the principal, ensuring continuous management of their affairs.
- Use Case: The general power of attorney is suitable for temporarily managing the principal's affairs without needing provisions that account for mental incapacity. The durable power of attorney is preferred for long-term estate planning and incapacity planning.
Conclusion
We specialize in providing tailored advice and creating power of attorney and estate planning documents that align with your needs and goals. Whether you're planning for short-term needs or long-term incapacity, our experts ensure your affairs are in order, no matter what the future holds.
