4 Types of Power of Attorney

Powers of Attorney

Powers of attorney come in different forms, each suited for a specific purpose. They serve as useful tools in any estate-planning effort. 

Power of attorney documents can play a vital role in your estate planning efforts. There are four types of power of attorney documents, and you should consider each one carefully to determine which will work best for you when you need an agent to act in your place.

You can authorize four main types of powers of attorney. Why you need power of attorney depends on what power.

Limited Power of Attorney

If you need someone to act on your behalf for a limited purpose, you will need to use a limited power of attorney. The document itself typically specifies the date/time at which the power ceases to be in effect.
Here are a few real-life examples: 

  • An author might assign limited power of attorney to their book agent so they can cash checks made payable to the writer. This way, the agent can take their commissions out of the author’s check, then issue a new check for the remainder to the author.
  • If you have plans to leave town on the very day the deed for your new house needs to be signed, you can assign limited power of attorney to a trusted individual solely for this purpose.

General Power of Attorney

This is a comprehensive, all-encompassing power of attorney. With this document, you assign every power and right you possess as an individual to a certain party. Although often used in cases where the Principal (that is you) is incapacitated, a general power of attorney also plays a role for people who do not have the time, skills, knowledge or inclination to handle all their financial matters. The power you assign lives as long as you do, or at least until you are incapacitated -- unless you choose to rescind it before that time.

Many busy people assign general power of attorney to an agent to handle things like:

  • Cashing checks
  • Collecting debts
  • Applying for benefits (Social Security, Medicare, Medicaid)
  • Managing your financial matters
  • Managing your business
  • Purchasing or selling things for you
  • Filing lawsuits on your behalf
  • Making financial investments on your behalf

Durable Power of Attorney

The key differentiator for a durable power of attorney is that it endures even after you have become incapacitated. In other words, you want to authorize a durable power of attorney if:

  • You want to give the named agent authority ONLY if you are unable to act for yourself; or
  • You want to give the named agent immediate authority that continues after you are unable to act for yourself

For example, if you have been diagnosed with an early stage of Alzheimer's disease, you would want to designate a durable power of attorney who can begin to act – or continue to act – on your behalf when the disease leads to your inability to act on your own.

On the other hand, any limited or general power of attorney dissolves upon your becoming incapacitated, and a court will need to appoint a guardian or conservator to handle your matters. You can rescind a durable power of attorney at any time prior to becoming incapacitated.

Springing Power of Attorney

This document serves the same purpose as a durable power of attorney, but it comes into effect only upon your becoming incapacitated. When drafting this power of attorney, it is vital that you make crystal clear your definition of “incapacitated.”

Things an Attorney-in-Fact Can and Cannot Do

You will need to specify in your power of attorney document which powers and duties you are assigning to the attorney-in-fact. Regardless of the type of power of attorney you implement, the attorney-in-fact has the power to do only what your document indicates. For this reason, you must take extra care to be clear and specific in the powers and duties you assign.
Below, are some things an attorney-in-fact is forbidden to do, regardless of what you may have written in your power of attorney document. 
An attorney-in-fact may not:

  • Testify that the Principal (you), have knowledge of facts, as in knowledge from witnessing an accident.
  • Vote on the Principal’s behalf in a public election
  • Create, change or revoke a Will
  • Render services under contract for the Principal, like writing a book
  • Take over the responsibilities of guardianship or conservator that might have been previously assigned to the Principal

Code of Conduct for Attorneys-in-Fact

An attorney-in-fact is obligated to assert a standard of care as they fulfill their responsibilities. The law regards attorneys-in-fact as a trustee; therefore, any violation of trust may result in the attorney-in-fact suffering both civil and criminal punishment.

Final Note of Caution on Assigning a Power of Attorney

You can appoint any competent person over the age of 18 to be your attorney-in-fact. You may also appoint financial institutions. However, keep in mind that this is a large responsibility to hand over to an individual. It’s critical that you choose thoughtfully and wisely.

This person is literally speaking for you, and you want to be sure they are in line with your wishes. Those planning to get married or those who are already married may consider appointing their spouse. Above all else, you must trust this person.

LegalShield Can Help You with Powers of Attorney

LegalShield offers personal legal membership plans that give you on-demand access to legal expertise. Your LegalShield lawyer can advise you on executing powers of attorney – from writing the language that specifies powers and duties to defining what you mean by "incapacitated," to helping you work through the decision of how to choose an attorney-in-fact. They know exactly why power of attorney is so crucial and can advise you.

Click here for more information on IDShield and LegalShield 


LegalShield provides access to legal services offered by a network of provider law firms to LegalShield members through membership based participation. Neither LegalShield nor its officers, employees or sales associates directly or indirectly provide legal services, representation or advice. See a plan contract for specific state of residence for complete terms, coverage, amounts and conditions.

Submitted by Carmel, NY

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