how is medical power of attorney dofferent from financial power of attorney

by Emmet Kerluke 6 min read

A medical power of attorney authorizes healthcare decisions to be made on your behalf by a designated individual, while a financial power of attorney allows for an authorized individual to oversee your finances if needed. In general, a power of attorney is a document authorizing an individual to make decisions on behalf of another person.

A medical power of attorney authorizes healthcare decisions to be made on your behalf by a designated individual, while a financial power of attorney allows for an authorized individual to oversee your finances if needed.

Full Answer

How to establish a medical power of attorney?

Apr 30, 2021 · A medical power of attorney authorizes healthcare decisions to be made on your behalf by a designated individual, while a financial power of attorney allows for an authorized individual to oversee...

What does a medical power of attorney do?

How Does a Medical Power of Attorney Differ From a Financial One? While a financial power of attorney refers to legal and financial matters, a health care proxy serves to appoint a person who will make medical care choices in your stead. The designated health care agent can decide on: Medical staff members that should be hired or dismissed

What is a medical power of attorney mean?

Jun 04, 2019 · A financial power of attorney is designated to make financial decisions. A medical power of attorney is designated to make medical decisions. Financial and medical powers of attorney can be designated to two different individuals or one person for …

Who needs a financial power of attorney?

Feb 05, 2021 · In the latest video in our Estate Planning 101 educational video series, Attorney Thomas B. Burton discusses in-depth what the terms 'Health Care Power of Attorney' & 'Financial Power of Attorney' sometimes also called a 'Durable Power of Attorney' really mean and how each document serves an important role as part of your estate planning.

What is a power of attorney?

A power of attorney is a legal document wherein one person, known as the principal or grantor, grants certain powers to another person known as the agent or attorney-in-fact. The principal must have the requisite mental capacity at the time of signing in order for the document to be valid.

When does a power of attorney become effective?

A power of attorney is considered effective once the agent's power to act kicks in. Depending on the language used in the document, that power may become effective immediately upon signing or it may be "springing," which means it doesn't become effective until the principal becomes incapacitated and can no longer make decisions.

What is the fiduciary duty of a power of attorney?

A fiduciary duty is a legal obligation to exercise a high standard of care and to act only in the best interest of the principal. In many states, the agent will sign the power of attorney. In many states, one to two witnesses must be present when ...

Is a springing power of attorney durable?

Because a springing power of attorney only becomes effective upon the incapacity of the principal, all springing powers of attorney are durable. However, powers of attorney that are effective immediately upon signing may be durable or may be extinguished upon the incapacity of the principal. Durable powers of attorney are only extinguished upon ...

Financial vs. Medical Power of Attorney: An Overview

A power of attorney is an authorization that allows an individual to make decisions on behalf of a specific person. In the case of a financial and medical power of attorney an individual has the right to designate a power of attorney to make decisions for them.

Financial Power of Attorney

A financial power of attorney, permits someone you have designated (your agent) to oversee your finances. Typically it is used so the person can step in and pay your bills or handle other financial matters.

Medical Power of Attorney

The power to make medical decisions on your behalf is not usually included in a financial power of attorney but it can potentially be part of a general power of attorney. A medical power of attorney is a designation which clearly states you have chosen the person named to make medical decisions when you no longer have capacity to do so.

An Argument for Choosing Two Different People

While many people choose the same person, such as a spouse or an adult child, to hold their medical power of attorney and their financial power of attorney, it’s not a decision to make automatically. Medical vs. financial powers of attorney can be created and designated for a variety of different reasons.

Key Takeaways

A power of attorney is an authorization that allows an individual to make decisions on behalf of a specific person.

What is a power of attorney?

A power of attorney is a legal document through which you, as the principal, name someone to have the authority to make decisions and take actions on your behalf. This person is called your agent or attorney-in-fact. Note that the person you name does not have to be an attorney. A durable power of attorney, sometimes called a DPOA for short, ...

How long does a durable power of attorney last?

A durable power of attorney generally remains in effect until the principal revokes the powers or dies, but can also be terminated if a court finds the document invalid or revokes the agent's authority, or if the principal gets divorced and the spouse was the agent.

What is durable power of attorney?

A durable power of attorney is the most common document of its kind, and the coverage afforded by the form is sweeping. It allows the agent to make financial, business and legal decisions on behalf of a principal, and the durability aspect extends the agent’s powers to during an event of incapacitation.

What is the difference between an agent and a principal?

Principal – the person handing over decision-making powers. Agent – the chosen individual to manage affairs, usually someone the principal deeply trusts , such as a close family member (also called an “attorney in fact”) Incapacitation – when the principal is no longer able to make decisions for themselves .

What are the duties of an agent?

Here’s a list of common matters for which an agent may be responsible to maintain on behalf of the principal: 1 Banking – Deposits and withdrawals 2 Government Benefits – Including but not limited to health care, social security payments, etc. 3 Retirement Plans – Such as 401 (k)’s. 4 Taxes – State and federal 5 Legal Advice and Proceedings – Filing forms with the court or handling legal proceedings. 6 Real Estate – The Buying, selling, or leasing of property. 7 Personal Property – The handling of all personal assets. 8 Insurance – Obtaining insurance and/or proceeds.

What are the benefits of government?

Government Benefits – Including but not limited to health care, social security payments, etc. Retirement Plans – Such as 401 (k)’s. Taxes – State and federal. Legal Advice and Proceedings – Filing forms with the court or handling legal proceedings. Real Estate – The Buying, selling, or leasing of property.

The Parties Involved

  • A power of attorney is a legal document wherein one person, known as the principal or grantor, grants certain powers to another person known as the agent or attorney-in-fact. The principal must have the requisite mental capacity at the time of signing in order for the document to be valid. Generally speaking, this means that the principal understood and appreciated the powers …
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Types of Powers of Attorney

  • A financial power of attorney is used to give an agent the authority to make certain decisions concerning the finances and property of the principal at a time specified by the principal. A medical power of attorney, in comparison, gives the agent the authority to make decisions concerning the health care of the principal if the principal should become unable to make those …
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Effectiveness and Durability

  • A power of attorney is considered effective once the agent's power to act kicks in. Depending on the language used in the document, that power may become effective immediately upon signing or it may be "springing," which means it doesn't become effective until the principal becomes incapacitated and can no longer make decisions. A power of attorney is referred to as "durable" i…
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Financial Power of Attorney

  • When preparing your financial power of attorney, the first thing you need to decide is what powers you want to give your agent. If you want to give your agent the right to make decisions about all aspects of your finances and property, you would use a general financial power of attorney. However, you may also use a financial power of attorney to give only one or a few powers to you…
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Medical Power of Attorney

  • Also referred to as a power of attorney for health care or health care proxy, a medical power of attorney gives the agent the authority to make decisions about the medical care the principal receives if the principal is unable to make his own decisions either due to incapacity or some other condition that prevents communication. By definition then, a medical power of attorney is …
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Choosing An Agent

  • An agent must be a mentally competent adult. Beyond that, the person you select as your agent must be someone you trust. Trust means different things to different people, and while every agent owes a fiduciary duty to the principal, when it comes to giving someone the power to make decisions about your finances, it's important that the person you choose is not only honest, but a…
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How to Revoke A Power of Attorney

  • If you execute a power of attorney and then decide that you no longer want your agent to have this authority, you may revoke the document. The principal can revoke a power of attorney at any time prior to becoming incapacitated. A power of attorney revocation form is a relatively short, straight-forward form that states the principal's name, address, the date of the power of attorney was ex…
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