There are four different Powers of Attorney that you may encounter:
- General Power of Attorney;
- Specific Power of Attorney;
- Springing Enduring Power of Attorney; and
- Immediate Enduring Power of Attorney.
The word Attorney in all of these documents does not mean a lawyer rather a specific person that you designate in the document.
A General Power of Attorney is used to appoint an individual to deal with your financial affairs. If there is no limitation of the General Power of Attorney, the person that you appoint can sell your property, cash in your investments, invest in other investments in their discretion and pay your debts. The individual is bound to act in a reasonable manner with respect to your finances, however, this document provides very wide powers over your finances to the appointed individual. This document can not be relied on if you lose mental capacity.
A Specific Power of Attorney is used to appoint an individual to deal with a specific asset or assets. The document is often used in a real estate transaction to appoint another individual to execute the documents for the purchase or sale of a property if you are not able to complete the transaction. It is also used for bank accounts to allow an adult child of an elderly parent to access a specific bank account to assist with day-to-day banking transactions. This document cannot be relied on if you lose mental capacity.
A Springing Enduring Power of Attorney is used to appoint an individual or individuals to deal with your financial affairs if you lose mental capacity and are no longer capable of making your own financial decisions. This document conveys wide reaching powers over your finances to the individual that you appoint. It does not come into effect until you lose mental capacity. This document is very useful for older individuals to ensure that their finances will be taken care of if they lose mental capacity.
An Immediate Power of Attorney is similar to a Springing Power of Attorney; however, the appointment takes effect immediately and continues if you lose mental capacity.
Please consult us or a reputable estate planning lawyer to ensure that the proper document is executed to meet your specific needs.
