Power of attorney forms allow for a person (Referred to as the ‘Principal’) to choose someone else (Referred to as the ‘Agent’ or ‘Attorney in Fact’) to handle any type of financial or medical related decision on his or her behalf. All activity that is done must be in the principal’s favor, otherwise known as a fiduciary duty.
There are six (6) major types of power of attorney forms that are used;
- Durable – The most common, allows a person to handle another’s financial affairs with unrestricted use. It can be used by the agent if the principal should not be able to speak for think for themselves due to dementia or in a state of incapacitation.
- General – Has all the same powers as the durable, except that it does not remain valid if the person is no longer coherent. This type is not legal in some States such as Florida.
- Limited – Allows a person to be selected to carry out a single monetary related activity on someone else’s behalf. Once it is complete, the form becomes void.
- Medical – Allows a person to select another to make any type of health care decision on his or her behalf. Often times this document is combined with the durable.
- Motor Vehicle – Allows a person to handle transactions at the Department of Motor Vehicles (DMV) office or
- Tax – Allows an individual, typically an accountant, to file taxes on your behalf.