Giving someone power of attorney is an important part of estate planning in Colorado. However, many people don’t realize that there are actually four types of power of attorney. Knowing the differences between them is an important part of protecting yourself and your assets.
What are the different types of power of attorney?
A durable POA is one of the most common powers of attorney. When you give someone a durable POA during the estate planning process, they’ll have power of attorney until your death. However, you can still revoke this person’s power of attorney at any time.
Conversely, a conventional POA lasts until you become incapacitated. This gives the individual a certain level of control over your finances. However, they lose their power of attorney as soon as you’re incapacitated, which prevents them from taking advantage of the situation. You can specify the legal decisions that the individual can make while they still have POA.
If you don’t need to give someone power of attorney now, you could set up a springing POA that takes effect under certain circumstances. For example, the POA might take effect if you’re mentally or physically incapacitated. The individual you choose can step forward and make legal decisions on your behalf.
Finally, a medical POA is also known as a health care proxy. This person can make medical decisions for you while you’re incapacitated. Typically, this individual won’t get power of attorney unless you suffer from a serious medical event. You can choose one person for all potential events or give multiple people POA for different situations.
How do you choose someone for power of attorney?
Since this individual can make important medical and legal decisions on your behalf, you don’t want to make this decision lightly. Even a close friend or family member might not be able to handle the responsibility.
Fortunately, an attorney may help you choose someone for power of attorney and decide which type of POA you need. You might want to include multiple POAs in your will to cover all the bases. Some people want to give one person control of everything while others want to limit the decision-making abilities of multiple POAs.