This was originally published on Monday, September 21, 2015, in the Pacific Daily News. Click here to subscribe to the PDN.
Question: I am a single mother and just started a new job. My job will require me to travel frequently. I will be leaving my daughter with my parents who will also be house sitting for me. I know that I should leave a power of attorney for them but I am not sure what type.
Answer: Congratulations on your new job! You are smart to think about getting a power of attorney. If something should happen to you, your daughter, or even your house, you need someone there to make decisions for you. There are several types of powers of attorney and which one you choose depends on how much power you want to give the agent(s), the person/people you give permission to carry out your wishes.
- General Power of Attorney. This is the broadest type of authorization you can give to your agent. A general power of attorney can be part of an estate plan as well. A power of attorney can include the buying and selling of property, managing your real estate, or taking care of financial decisions. A general power of attorney can give your agent the authority to file your taxes. It can also include the power to represent you in a court of law. Because this legal document is very powerful you need to appoint someone whom you trust.
- Special or Limited Power of Attorney. Gives the agent the authority to act on your behalf on specific situations. It can cover most of what a general power of attorney covers but narrows the scope to what authorization your agent has. You can give your agent authorization to care for your home but not sell it. You can have more than one special power of attorney to the same agent for different situations.
- Conventional Power of Attorney. Most standard power of attorneys fall under this category. The agent has power from the time the document is signed until the principal becomes mentally incapacitated.
- Durable Power of Attorney. This gives your agent the right to make decisions if you become incapacitated or pass away. A general and special power of attorney can be made a durable power of attorney. If your power of attorney does not specifically say that it is “durable” then your agent can only exercise the power you have. In other words, if you have an accident and slip into a comma your agent cannot sign to sell your home since you are not able to do so yourself.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.