What is a power of attorney?

A power of attorney is a legal document that allows you to appoint someone to make financial and legal decisions for you.

There are two types of power of attorney: general and enduring.

A general power of attorney gives another person the ability to deal with your affairs while you still have the capacity to make decisions for yourself. For example, if you are on vacation, you can grant someone a power of attorney to deal with certain matters while you are away. A general power of attorney has the benefit of being relatively inexpensive and can be revoked at any time. Because it gives the other person significant control over your assets, a high degree of trust is required. Creating a general power of attorney does not protect your assets from the claims of creditors or other parties; it simply gives your attorney the power to deal with those assets on your behalf.

An enduring power of attorney is similar to a general power of attorney; however, an enduring power of attorney continues to operate even if you are no longer able to make decisions for yourself. To be an enduring power of attorney, the document must specifically provide that it is meant to continue operating if you become mentally incapacitated. It cannot be revoked once you are incapable of making decisions for yourself. As with a general power of attorney, it is very important to have a high degree of trust in the person to whom you grant an enduring power of attorney.