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What is a Power of Attorney?

A Power of Attorney is a legal instrument that allows a designated person to act on your behalf. They are your agent and have authority to make decisions. The range of decisions they can make depends on which Power of Attorney you have executed, there are three.

The 3 types of Power of Attorney

1. Limited: A limited Power of Attorney designates an agent for a specified purpose. For example, if you have real estate in another state, you can designate someone you trust who lives nearby to sell that property on your behalf. Once they have completed their duties, the power terminates.

2. General: A general Power of Attorney allows the agent to conduct any duties that are legal, so long as the authorized activities are specified.

3. Durable: A durable Power of Attorney is the most common. All others terminate if you become incapacitated. The durable stays intact and allows the agent to continue making decisions on your behalf, even if you are incapacitated. However, certain language must be included stating the power remains when the principal is incapacitated.

A principal can have more than one Power of Attorney and can designate anyone reliable and trustworthy who is 18 or older to act on their behalf. Speaking to an attorney who is experienced with estate planning can help you determine which type of document suits your needs and can even advise you about which agent to choose, as well as discuss other details, including the fiduciary relationship and codes of conduct for your agent.

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