Different Types of Powers of Attorney

There are Nondurable, Durable, and Springing Power of Attorney. A Nondurable Power of Attorney takes effect immediately. It remains in effect until it is revoked by the Principal, or until the Principal becomes mentally incompetent or dies.

A Nondurable Power of Attorney is often used for a specific transaction, like the closing on the sale of residence, or the handling of the Principal's Financial affairs while the Principal is traveling outside of the country.

A Durable" Power of Attorney enables the Agent to act for the Principal even after the Principal is not mentally competent or physically able to make decisions. The Durable Power of Attorney may be used immediately, and is effective until it is revoked By The Principal or until the Principal's death.

A Springing Power of Attorney becomes effective at a future time. That is, it "springs up" upon the happenings of a Specific Event chosen by the Power of Attorney. Often that event is the illness or disability of the Principal.

The Springing" Power of Attorney will frequently provide that the Principal's Physician will determine whether the Principal is competent to handle his or her financial affairs. A Springing Power of Attorney remains in effect until the Principal's death, or until revoked by a court.

Power of Attorney and Planning Ahead Can Help

At present, many people have not planned for their potential incompetence. There are number of legal devices that are readily available to assist people in expressing their wishes in advance. Two of these devices include a Durable Power of Attorney for Financial Decisions (General Durable Power of Attorney), and Durable Power of Attorney for Health Care Decisions. A senior citizen may become permanently disabled due to a stroke, or a young adult might be rendered temporarily unconscious as a result of an automobile accident. In both of these scenarios, the trauma thrust upon everyone involved can be overwhelming, especially when interested parties disagree about how to handle the crisis. As with most things in life, planning ahead can help.

The two devices, Durable Power of Attorney for Financial Decisions and Durable Power of Attorney for Health Care Decisions, will be discussed separately.

A durable power of attorney, is a form of agency. The person who gives the power is the principal, and the person who receives the power is the "attorney-in-fact" or agent. "Durable" in this context means that the agent's power will survive the principal's incapacity or disability. As a result Durable Power of Attorney's, can be used as an alternative to guardianship in some states under certain circumstances, provided the principal executed the document before losing capacity.

As a general rule, a General power of attorney is also referred to as a Durable Power of Attorney for Financial Decisions, or simply a Durable Power of Attorney. A Durable Power of Attorney for Health Care Decisions is also a Durable Power of Attorney, but its authority is limited to health care decisions. In Kansas, both powers can be contained in the same document. Because these two documents convey such divergent authority to one person, many seniors choose a different person for each of these powers. The agent's authority to act for the principal under a Durable Power of Attorney is based on the powers that the principal gives to her. Whether broad, general powers or limited, specific powers are given to the agent is completely determined by the principal. Among other things, the principal may delegate to the agent in the Durable Power of Attorney the authority to make deposits and withdrawals from his checking account, to file his tax returns, and to sell his home. There are a few powers, however, that the principal may not delegate. For example, the agent cannot prepare a will, vote, or seek a divorce on the principal's behalf. In Kansas, the principal may grant a gifting" power to her agent, but this power generally must be stated with specificity within in the Durable Power of Attorney.

Two primary methods exist to determine the effective date of an agent's power under a Durable Power of Attorney. First, a Durable Power of Attorney may confer power to an agent at the time the documents are executed and delivered. A second method reserves the agent's power until the principal has become incapacitated or disabled. Upon the occurrence of either of these events, the power springs into effect. This type of Durable Power of Attorney is labeled "springing." Kansas law provides for both types in the Uniform Durable Power of Attorney Act. Senior citizens' needs vary; therefore, no solution is best for all people. Many considerations will need to be evaluated in order to determine how the senior's needs are best meet.

A durable power of attorney is revocable by the principal while he still has capacity. If the agent has a financial interest in the subject matter of the power of attorney, the power is generally irrevocable. Most senior citizens who execute Durable Power of Attorney's are getting assistance with their day to day personal affairs and their agents do not have an ownership interest in the senior's property which would preclude revocation. In addition, revocation can be by implication, in addition to, destruction of the document or express revocation by the principal.

Other modes of termination include: death of the principal or agent, occurrence of a specific event, qualification of a guardian, or the passage of a date of expiration. Generally, after the death of the principal, the agent of a Durable Power of Attorney may bind the principal using a Durable Power of Attorney only if she does not know of the occurrence of this event.

The agent binds the principal in accordance with the laws of agency. As a result, the principal is personally liable for contracts made by the agent on the principal's behalf. The agent should follow the direction of the principal while the principal remains competent. The agent has a duty to act solely for the benefit of the principal, and if she does not, she is subjected to liability for her breach. Although this general principal is true, often the agent may not have any assets for which she may be held accountable. As a result, senior citizens are often advised to select a trustworthy person to be their agent. If the principal's competency is in question, the agent may need to seek determination of a court prior to acting against the wishes of the principal, or she may be liable to the principal for breach of her fiduciary duty.

Kansas law does provide for the recording of any instrument which affects real estate. Recording, however, is not currently required by Kansas law. If the original Durable Power of Attorney was recorded, however, any subsequent revocation should be recorded. Some states do required recording of a Durable Power of Attorney that will affect real estate.

The Kansas statutes provide for a Durable Power of Attorney for Health Care Decisions. The same basic concepts explained above for Durable Power of Attorney apply to the Durable Power of Attorney for Health Care Decisions with regard to agency law, effectiveness, revocation, and termination.

The key difference between the Durable Power of Attorney and the Durable Power of Attorney for Health Care Decisions is the authority granted. The Durable Power of Attorney for Health Care Decisions specifically grants authority to the agent to make decisions about and relating to medical treatment. For example, the agent make consent to treatment, refuse to consent to treatment, or withdraw consent to treatment. In addition to these decisions directly about medical treatment, the agent may make all arrangements at any hospital or nursing care facility, employ or discharge care personnel, request, receive, and review any information about the personal affairs or physical or mental health of the principal.

As a contingency, it is recommended that the principal select a successor to his agent. The successor attorney-in-fact may be designated in the same document as the primary attorney-in-fact. If this does occur, the Durable Power of Attorney will continue, beyond the life of the primary attorney-in-fact, provided the successor is living and competent.

A complete discussion of statutory formalities, drafting, and various tax liability is beyond the scope of this summary. It should be noted however, that most states restrict who may be a witness to Durable Power of Attorney or Durable Power of Attorney for Health Care Decisions, and some restrict who may be an Health care agent.

This overview of the law is for reference and education only, and is no replacement for competent legal counsel.

Durable Power of Attorney:Who Will Make Life or Death Decisions?

University of Iowa Health Science Relations Peer Review Status: Internally Peer Reviewed Many people have heard of a Living Will, a document that explains to your family, friends, doctor, and the courts what you do and do not want done to prolong your life.

Fewer people have heard of the Durable Power of Attorney for Health Care. Durable Power of Attorney for Health Care lets you choose a person, or persons, who can legally make health care decisions for you if you become unable to make those decisions and speak for yourself," says Gretchen Schmuch, a family practice social worker in the University of Iowa College of Medicine.

"One of the most difficult things about choosing your legal decision-maker is discussing end-of-life matters," Schmuch says. Questions you should ask yourself include:

1. Whom do I want to make decisions about my health care?

2. Is quality of life more important than quantity of life?

3. How important is physical and/or mental functioning in decisions to accept, refuse, or limit medical treatment?

4. What are my spiritual beliefs and how do they fit with my choices?

5. Are food and water basic human rights, regardless of delivery (tube, mouth, or vein)? A majority of Americans say they want to participate in their health care decision-making until they die, but approximately 15 percent have completed a Durable Power of Attorney.

If asked, most people have a general idea of what they want, Schmuch says. It is important for people to discuss their values, health care beliefs, and wishes with their families and their doctors. "But doctors often wait for the patient to bring the subject up, and patients wait for the doctor. So we have a lack of communication, with no decisions being made until a crisis arises,"

Schmuch says. During a crisis, such as when an elderly parent dies but is revived or a spouse has a heart attack and is in a coma, a decision as crucial as what treatment the patient would want makes a difficult situation more painful. If a patient does not have a Durable Power of Attorney, decisions must still be made.

"In Iowa if no one has been designated, the decision-making authority passes--in order--to guardian, spouse, majority of adult children, parents, and sibling. In a few cases the matter would be decided by a hospital board or the courts. "It's so important to talk with each other to determine what should be done,"

Schmuch says. "Living wills are valuable tools, but no document can provide answers in all situations. Selecting someone who understands and can advocate for your health care directives and giving him/her over the authority to make decisions for you will put you at ease now," says Schmuch. "And your family and friends will not have to worry about who will make the decision in the future." If you have questions about Durable Power of Attorney and Living Wills, talk to your doctor.

Lifetime Planning, with a Power of Attorney

An important part of lifetime planning is the Power of Attorney. Valid in all states, these documents give one or more persons the power to act on your behalf. The power may be limited to a particular activity (e.g., closing the sale of your home) or general in its application, empowering one or more persons to act on your behalf in a variety of situations.

It may take effective immediately or only upon the occurrence of a future event (e.g., a determination that you are unable to act for yourself). The latter are "springing" Powers of Attorney.

It may give temporary or continuous, permanent authority to act on your behalf. A power of attorney may be revoked, but most states require written notice of revocation to the person named to act for you.

The person named in a Power of Attorney to act on your behalf is commonly referred to as your "agent" or "attorney-in-fact." With a valid Power of Attorney, your agent can take any action permitted in the document. Often your agent must present the actual document to invoke the power.

For example, if another person is acting on your behalf to sell an automobile, the motor vehicles department generally will require that the Power of Attorney be presented before your agent's authority to sign the title will be honored.

Similarly, an agent who signs documents to buy or sell real property on your behalf must present the Power of Attorney to the title company. The same applies to sale of securities or opening and closing bank accounts.

However, your agent generally should not need to present the Power of Attorney when signing checks for you.
Why would anyone give such sweeping authority to another person? One answer is convenience. If you are buying or selling assets and do not wish to appear in person to close the transaction, you may take advantage of a Power of Attorney. Another important reason to use Powers of Attorney is to prepare for situations when you may not be able to act on your own behalf due to absence or incapacity.

Such a disability may be temporary (e.g., due to travel, accident, or illness) or it may be permanent.

If you do not have a Power of Attorney and become unable to manage your personal or business affairs, it may become necessary for a court to appoint one or more people to act for you.

People appointed in this manner are referred to as guardians, conservators, or committees depending upon your local state law.

If a court proceeding, sometimes known as intervention, is needed, than you may not have the ability to choose the person who will act for you. With A Power of Attorney, you choose who will act and define their authority and its limits, if any.

What if I move? Generally, a Power of Attorney that is valid when you sign it will remain valid even if you change your state of residence. Although it should not be necessary to sign a new Power of Attorney merely because you have moved to a new state, it is a good idea to take the opportunity to update your Power of Attorney.

Will my Power of Attorney expire? Some states used to require renewal of Powers of Attorney for continuing validity. Today, most states permit a "durable" Power of Attorney that remains valid once signed until you die or revoke the document
However, you periodically meet with your lawyer to revisit a Power of Attorney and consider whether your choice of agent still meets your needs and learn whether developments in state law affect your Power of Attorney.