Saturday, July 9, 2011

Durable Vs Springing Power of Attorney - Which One Do You Need?

One of the most important documents you should have in your estate plan is a Power of Attorney.

But do a little research on POAs and you'll discover there's more than one type: General, Durable and Springing. So which one do you need?

A General Power of Attorney is typically used when you need someone to handle legal affairs on your behalf for a short period of time. This could be because you're going out of town for example, or perhaps you want an attorney to negotiate a contract on your behalf. The General POA will grant that authority within the constraints you define.

A Durable Power of Attorney works the same way but unlike a General POA, it is not automatically revoked when you become mentally incapacitated. This type of POA is a useful tool for spouses or partners who want to ensure that someone they trust always has access to financial accounts and the ability to pay bills, talk to creditors and deal with other normal financial affairs.

The Springing Power of Attorney works just like the first two but only comes into play when you've been diagnosed as mentally incapacitated. This is often the POA of choice for people who want to ensure that their estate is protected if they become disabled. As long as you are mentally sound, the POA remains inactive, but if something should happen and you are no longer able to handle your own affairs, the Springing POA would "spring" into action.

So which one is right for you?

That of course will depend upon your individual needs. To learn more about POAs and how to use them in your estate plan, consult with a qualified estate planning attorney.

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