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There are essentially two general types of powers of attorney in which multiple or general powers can be granted to a selected individual known as the “attorney-in-fact”.  These include the durable power of attorney and regular power of attorney.  Each jurisdiction has its own perspectives on each of these types of documents.  The maker of the power of attorney is known as the “grantor”.

A general power of attorney authorizes an individual to act on his/her behalf in financial matters, and a durable power of attorney is a document that remains in effect when you are no longer able to make decisions.   Usually, the document must state whether it remains or becomes effective after incapacitation. If the power of attorney is written so that it becomes effective after incapacitation, the document will become effective immediately after it is signed and the named attorney-in-fact swears in an affidavit that the principal is incapacitated.  Thus, the definition of incapacitation must be defined clearly in the document so that the attorney-in-fact and any related parties know exactly when the powers go into effect.

The durable power of attorney applies to most situations involving health concerns for the grantor.  A durable power of attorney prevents loved ones from having to initiate guardianship proceedings in which the court requires the incapacitated individual to be presented before the court in an emotional setting.  The document allows the grantor to enumerate certain powers to be granted to the attorney-in-fact such as powers to manage checking accounts, make gifts, settle claims, enter into contracts, file tax returns, and maintain and operate business interests without the need of judicial intervention.