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There are many types of POA but the two most common you’ll come across are Durable and General Power of Attorney forms. These legal documents can grant far-reaching powers to an agent but there are many differences between them you must consider when choosing which is best for you and your needs.

To help make this decision easier before starting a Power of Attorney form, this article looks at the key distinction between these two types of legal instruments and what you should keep in mind when you select your preferred form of POA.

General POA: How and When It Can be Used

A General Power of Attorney is a form of financial POA grants the agent control over some or all of an individual’s personal and fiscal affairs (unless specified otherwise on the initial legal form). This allows them to complete purchases, transactions and sign contracts on your behalf as you would as an individual.

General POAs can either be temporary or long term documents depending on your needs and the duration that you want the agent to make decisions for you. Normally they come into effect as soon as they’re signed (unless otherwise is stated) and end when the principal dies or becomes incapacitated.

General Power of Attorney Pros

The common powers that a General POA grants the agent make it easy for them to quickly and effectively respond to any and all financial requirements you have. This can ease the process of:

  • Selling a property
  • Making business transactions
  • Doing government-mandated tasks like filing tax returns
  • Borrowing money
  • Paying bills

These can all be done without you signing the documents in person. This can be highly practical if you are frequently overseas and unable to sign documents yourself. Alternatively, it can be highly practical if you need assistance to complete these types of transactions from a professional or knowledgable acquaintance.

General Power of Attorney Cons

The biggest disadvantage of a General Power of Attorney is that it ends automatically if you, the principal, become incapacitated. These conventional documents are only designed to be in place whilst the appointing individual is still fully lucid and conscious. Should anything happen to you during this time then the validity of the document will expire.

Additionally, General Power of Attorney’s only focus on financial decision making. They cannot be used for other necessities such as your medical needs.

Durable POA: What it is and How it is Used

Durable Power of Attorney, on the other hand, is a much more robust form of legal instrument. It allows the Agent to continue making decisions for you even if you become incapacitated.

It is the best option for Principals looking to appoint an agent to look after their financial or medical needs during advanced age or time of sickness. This will allow your Attorney-in-Fact to keep working on these issues for you if you cannot manage them personally. Unless specified otherwise it can continue to be used until your death or it is revoked.

Durable Power of Attorney Pros

Unlike General POAs which are normally used for your financial requirements only, Durable Power of Attorneys can be used for more serious, far-reaching personal needs.

For example, a Durable POA can be used if you are experiencing serious health complications. In order to grant these kinds of powers to an agent, you will need a specific Medical Power of Attorney and often a Living Will to formalize your agreement with the Agent and express your healthcare preferences.

However, you can also take out a Durable Power of Attorney to allow your agent to manage or keep managing your financial interests if and when you become incapacitated. The POA, in this case, can become effective at the time of signing or you can stipulate the exact future date or scenario when it will come into use.

Medical POA and Financial Power of Attorneys are 2 separate legal instruments, however. It is therefore crucial that you decide if you need one or both of them in your situation when you plan for the years to come.

Durable Power of Attorney Cons

The situations arising from a Durable POA can make it more complicated to override the document. Given the nature of its use and broad authority it grants, there may come a time where the principal cannot simply revoke the Power of Attorney as is their right, for example, if they are incapacitated and cannot state their wishes properly.

In the event of a dispute in this scenario, there will be more complications for friends or loved ones to remove the granted powers from the agent if they misuse them. If this happens it may be necessary to escalate the matter to the courts.

A lot of thought needs to go into how to choose the right type of Power of Attorney you will need. When you design your document be sure to consider your exact necessities as the principal and think about the complexities of the powers you are granting. That way you’ll be able to create a form that responds perfectly when it is needed.

LawDistrict’s legal instrument creation tools can help you do that. We give you step-by-step guidance on the different types of powers, important dates you need to specify, and key points to remember during the process.


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