When it comes time to think about what will happen to your estate if you are unable or unwilling to handle your affairs, it is never a good idea to assume that your spouse will automatically have the authority to access bank accounts or make healthcare decisions for you. In fact, your spouse may need a power of attorney authorizing them to do various activities including, accessing bank accounts, signing a contract, making health care decisions, or handling financial transactions on your behalf.
In this article, you will learn more about a power of attorney, the different types in the States where we practice law, and why a power of attorney is vital for every married couple’s estate plan.
What is a power of attorney?
A power of attorney is a legal document that grants authority to another person to act on your behalf in various financial, legal, or other predetermined matters. The person who creates the power of attorney is referred to as the principal. The person given the authority described in the power of attorney is called the agent or “attorney-in-fact.”
The power of attorney document allows the agent to make decisions and take actions as specified within the document. The scope of authority can vary depending on the specific terms outlined in the power of attorney. It can be limited to a particular transaction or grant broader powers to handle various aspects of the principal’s affairs.
What are the different types of powers of attorney?
There are different types of powers of attorney, including a general power of attorney, limited power of attorney, durable power of attorney and springing power of attorney. Each type serves different purposes and grants different levels of authority.
General Power of Attorney: A general power of attorney grants the agent broad powers to handle a wide range of financial and legal matters on behalf of the principal. However, it does not remain effective if the principal becomes incapacitated or mentally incompetent.
Limited or Special Power of Attorney: A limited or special power of attorney grants the agent limited powers to handle a specified business, perform specified acts, such as selling real property, or make certain decisions on your behalf.
Durable Power of Attorney: A durable power of attorney, on the other hand, remains valid even if the principal becomes incapacitated. This type of power of attorney is commonly used to plan for potential future incapacity or for situations where the principal wants to grant ongoing authority to the agent. For more about the Pros and Cons of a Durable Power of Attorney, click here.
Springing Power of Attorney: A springing power of attorney becomes effective only upon the occurrence of a specific event or condition, such as the principal’s incapacity. It can be designed to “spring” into effect when certain predetermined circumstances are met.
Do spouses automatically have power of attorney?
In the state of Florida, Minnesota and Pennsylvania, spouses are not automatically granted power of attorney for each other. A power of attorney is a legal document that grants someone the authority to act on behalf of another person in general or in specific matters and it is not automatically granted based on the spousal relationship alone.
If you want to grant your spouse power of attorney, you would need to have a power of attorney document created and signed that would designate your spouse as your agent. This document should outline the scope of the authority granted and any specific instructions or limitations. Without the proper documentation, if you were to become incapacitated, your spouse may have to ask the court for authority over your financial or medical affairs.
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It’s important to note that laws vary by State, and it is always advisable to consult with an attorney or legal professional like DiFranza Law to understand the specific requirements and regulations in your jurisdiction. We can help ensure that your power of attorney document complies with state laws and meets your individual needs. Our estate planning attorneys are licensed to practice in Florida, Minnesota, and Pennsylvania.