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Power of Attorney Basics

A power of attorney is a document that gives one person the legal authorization to make decisions on someone else’s behalf.  This power extends to many different business and legal matters.  By executing a power of attorney, the grantor (sometimes called a donor or principal) is authorizing his or her agent to assume these legal powers. Institutions such as banks, hospitals, and the IRS require that power of attorney be done in writing.

There are actually several different types of powers of attorney, including general powers of attorney and limited, or special, powers of attorney.  General powers of attorney give the agent blanket powers, while limited or special powers spell out specific circumstances in which the agent can act on the grantor’s behalf.

One of the most common types of powers of attorney is the health care power of attorney.  This gives another the ability to make health care decisions for the grantor in the case he or she is unable to do so for themselves.  This includes authorizing surgeries, refusing medical services, and even removing the grantor from life support.  This is different from a living will, which outlines a person’s medical desires but does not give another the power to make decisions.  In the case of mental illness, a psychiatric advance directive document, a special type of power of attorney form, must be prepared.

In some areas, a grantor can create a special type of power of attorney known as contingent power of attorney.  This document only comes into effect after a person becomes incapacitated.  The document very carefully outlines exactly when the power of attorney comes into play and exactly what powers are given.