A power of attorney is a legally binding document that is used by a grantor or principal to empower an agent or attorney-in-fact to act on behalf of the principal.
A general power of attorney is used to give someone the ability to act in your behalf over a wide range of purposes. There is no particular expiration date. Once you give someone a general power of attorney he or she could act for you indefinitely, and the power would go into place immediately.
Another type of power of attorney is a limited power of attorney. You are not giving full decision-making capacity to someone you name as an attorney-in-fact in a limited power of attorney. These powers are intended to be in effect for limited purposes, or for a single purpose.
You may give someone a limited power of attorney to sign papers for you pursuant to a single transaction, because you simply cannot be there yourself to consummate the deal.
General and limited powers of attorney would not remain in effect if the grantor or principal was to become incapacitated.
Durable Powers of Attorney
In the field of estate planning durable powers of attorney are widely utilized. A durable power of attorney will in fact remain in effect if the grantor or principal becomes incapacitated.
A comprehensive estate plan is going to include an incapacity planning component. If you think it through, elders typically do not die on Monday after having been perfectly capable of handling all of their own affairs on Sunday.
You should account for the possibility of incapacity when you are creating an estate plan.
With a durable power of attorney you can name someone to manage your financial affairs in the event of your incapacitation.
It is also possible to execute a document called a springing durable power of attorney in some jurisdictions. With this legal device you name an agent who would be empowered to act in your behalf only if you were to become incapacitated. He or she would have no power until and unless you were to become unable to make your own sound decisions.
Incapacity Planning Consultation
If you have not considered the possibility of incapacity late in your life, you should definitely discuss the matter with a licensed estate planning attorney. It is relatively simple to put a durable power of attorney in place to name your own hand-picked financial decision-maker.
Those who become incapacitated without taking any steps to prepare for this contingency are generally going to face guardianship proceedings. The state would be petitioned to appoint a guardian to manage the affairs of the incapacitated ward.
You can prevent this and take things into your own hands by executing a durable power of attorney.