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Making sense of the different types of power of attorneys

Having kids, building an investment or asset portfolio, living life on the edge or aging are all important reasons to begin the estate planning process. People who have a will, health care proxy and powers of attorney in place will rest easy knowing that those who love them the most will be empowered to make decisions for them should the unexpected occur and they're unable to do so themselves.

As for a power of attorney (POA), it can be utilized to give another individual the authority to make certain decisions if you're unable to do so yourself. Each can be invoked in a pre-determined circumstance, is enforceable for a certain period of time and designates a certain condition you must be in for a pre-determined individual to step in and make a decision for you.

With a general POA, it can be utilized when it is not practical for an individual to be present to take certain actions. It's also often drafted to be used in the instance someone is traveling outside of the area they generally reside in. Additionally, it may be written so that it will go into effect if an individual becomes mentally or physically incapacitated to the point that he or she can't make decisions for him or herself.

A general POA can be used for a number of purposes. It may be used to convey either a car or property to another or for the purpose of entering into contracts such as signing a life insurance policy or to settle a claim. It can also be used to file taxes or to handle banking for another.

While the general and limited POA function similarly in that they allow a designated individual to make decisions on behalf of the person drafting the document, there's a fundamental difference between the two. With a limited POA, an individual can make these decisions only in certain, specific and stated circumstances and not for an extended period of time as is the case with the former.

When you're selecting the individual that will be allowed to make decisions on your behalf, it's recommended that you do so wisely. It's also important that you're careful with your choice of words. If you're not, then you risk someone making decisions for you that could adversely impact your future. A Queens estate planning attorney can help you make sense of the different power of attorney options that exist.

Source: Zing, "Types of power of attorney: Which POA is right for me?," accessed Aug. 16, 2017

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