Two Types of Power of Attorney

Powers of attorney (POAs) are often referred to as “living wills” and are used to designate someone to act for you while you are still alive, but unable to make decisions for yourself.

There are two types of POAs.

POA for personal care identifies someone, or more than one person, to make decisions regarding your aspects of your personal life such as health care and medical treatment, housing, meals, clothing, medical treatment, admission to care facilities, and personal care. This personal care attorney will only make these decisions when it is determined that you are incapable of making these decisions by yourself.  This person is also expected to make decisions that you would have made yourself, if capable.  Therefore, it is important that your POA(s) for personal care knows and understands your desires and intentions!  Any instructions that you feel particularly strongly about should be explained to your legal team at the time your POA and estate planning documents are being prepared.

POA for property designates someone to make decisions about your financial affairs. For example, paying or collecting debts, maintaining or selling your home, managing investments, or overseeing certain business endeavors.  This person will be able to do anything that you can do with respect to your financial matters, except they cannot rewrite your Will.  As with preparing specific Wills to keep personal and corporate assets separate, establishing limited or specific POAs can help to keep things neat, tidy, and organized during unfortunate situations.  For example, perhaps you have a business partner or employee who you have tremendous confidence in to run your business in your absence on a daily basis for short or long-term periods of time.

It is important to remember that in naming someone as a Power of Attorney you are granting them the ability to make decisions on your behalf in whichever areas you have identified.  Unlike a Will where you legally outline your desires, the person who holds your Power of Attorney has some flexibility to operate as they see fit.  This means that great consideration should be given to who you ask to fill these role and there should be a mutual understanding as to how certain situations and decisions should be approached.