Difference between Durable Power of Attorney and General Power of Attorney
The concept of power of attorney is an essential legal tool that allows an individual to grant another person the authority to act on their behalf in various legal and financial matters. There are two primary types of power of attorney: durable power of attorney and general power of attorney. Understanding the difference between these two is crucial for individuals to make informed decisions about their estate planning and financial management.
Durable Power of Attorney
A durable power of attorney is a legal document that grants a person, known as the attorney-in-fact, the authority to make decisions on behalf of the principal, who is the person granting the power. The key feature of a durable power of attorney is its durability, which means it remains effective even if the principal becomes incapacitated or incapacitated. This type of power of attorney is particularly useful for estate planning and long-term care planning.
One of the primary benefits of a durable power of attorney is that it ensures that the principal’s affairs are managed effectively even if they are unable to do so themselves. This can be particularly important in situations where the principal has a chronic illness or is in a long-term care facility. A durable power of attorney can help avoid the need for a guardianship or conservatorship, which can be costly and time-consuming.
General Power of Attorney
In contrast, a general power of attorney grants the attorney-in-fact the authority to make decisions on behalf of the principal for a specific period or for a specific purpose. Once the specified period ends or the purpose is achieved, the power of attorney terminates automatically. This type of power of attorney is often used for short-term or specific transactions, such as selling a property or handling a business transaction.
One of the main differences between a durable power of attorney and a general power of attorney is that the general power of attorney does not remain effective if the principal becomes incapacitated. This means that if the principal is unable to make decisions for themselves, the general power of attorney will no longer be valid, and the principal may need to establish a guardianship or conservatorship.
Key Differences
1. Duration: A durable power of attorney remains effective even if the principal becomes incapacitated, while a general power of attorney terminates when the specified period ends or the purpose is achieved.
2. Incapacity: A durable power of attorney allows the attorney-in-fact to make decisions on behalf of the principal during incapacity, whereas a general power of attorney does not.
3. Estate Planning: Durable power of attorney is often used for estate planning and long-term care planning, while general power of attorney is more suitable for short-term or specific transactions.
4. Guardianship/Conservatorship: A durable power of attorney can help avoid the need for a guardianship or conservatorship, whereas a general power of attorney may not.
In conclusion, the difference between durable power of attorney and general power of attorney lies in their duration, effectiveness during incapacity, and their application in estate planning and financial management. It is crucial for individuals to understand these differences and choose the appropriate type of power of attorney based on their specific needs and circumstances.
