Types of Power of Attorney
Your power of attorney can be very broad or it can be very narrow. A broad power of attorney allows the holder of the power of attorney to speak or act on your behalf or to sign almost any documents you could have signed.
Your family may never need to have a power of attorney because, you hope, you will never be incapacitated. But when tragedy strikes, your family has so many issues to deal with, it is an act of love for you to be prepared.
A limited power of attorney, on the other hand, allows the holder of the power of attorney to perform only the specific acts you include in the document. You can give the holder of your power of attorney the ability to use his powers at any time, or you can create a triggering event that allows the holder of your power of attorney to exercise his powers once the triggering event occurs.
If you think you have been given a power of appointment or a power of attorney, but aren't certain which it is, ask for a copy of the document. You should definitely have a copy of a durable power of attorney in the event you need to act on someone's behalf in the future. You will need the document to prove you have the right to act.
Broad Power of Attorney
A very broad power of attorney typically gives these powers to the person you designate:
Power to do any act, thing, or personal or business transaction that you can do
Power to sue in your name and collect money owed to you from any source
Power to establish any financial accounts in your name
Power to terminate any financial accounts in your name
Power to buy or sell any type of property owned in your name
Power to improve, maintain, rent, or lease any of your property
Power to sign any contract in your name
Power to sign your name to any tax returns
There are only a few situations in which you cannot give authority to the holder of a power of attorney to act on your behalf. Typically you cannot grant someone the power to fulfill a contract that requires your personal services. For example, if you are the quarterback for your area's NFL team, you cannot give someone else the power to throw the football at next Sunday's game. You can't grant a power for someone else to complete a legal affidavit that requires your personal knowledge. You can't give someone the power to vote in an election for you. And you cannot give someone else the power to make a will for you.
Limited Power of Attorney
By creating a limited power of attorney, you can either limit what the person who holds a power of attorney can do or specify a triggering event that must happen before the holder of the power can exercise it. It is very common to give someone a limited power of attorney to get something done for you when you are not available.
What is the difference between a power of appointment and a power of attorney?
A power of appointment is a right given to a specified person within a will or trust to distribute your property. A power of attorney is a legal document granting a specified person the right to act on your behalf during your lifetime.
For example, you can give someone limited power of attorney to buy or sell property in your name. The described property could be a car, a house, or a boat. You name it, and you can give someone the power of attorney to buy or sell that piece of property on your behalf. Alternatively, your power of attorney might include a triggering event that must happen before the power of attorney is valid. The most common triggering event is your becoming disabled or incapacitated.