POWER OF ATTORNEY LANGUAGE
Agent: An agent or attorney-in-fact is a person that is appointed to act on someone else’s behalf. This person should be very trustworthy because he/she will have a lot of power over the financial and/or medical affairs of the principal.
Principal: A principal is a person that appoints an agent to act on his/her behalf. This person should put a lot of thought and consideration into their choice of agent.
Incapacitated person: According to the Code of Virginia, an incapacitated person is “an adult who has been found by a court to be incapable of receiving and evaluating information effectively or responding to people, events, or environments to such an extent that the individual lacks the capacity to (i) meet the essential requirements for his health, care, safety, or therapeutic needs without the assistance or protection of a guardian or (ii) manage property or financial affairs or provide for his support or the support of his legal dependents without the assistance or protection of a conservator.” Based on this definition, having poor judgment alone is not enough to be considered an incapacitated person in Virginia.
TYPES OF POWER OF ATTORNEY
General Power of Attorney
In a general power of attorney, the agent is given all of the powers and rights of the principal. Depending on the language in the document, this agreement might be terminated once the principal becomes incapacitated. Generally, a principal would want their power of attorney to survive their incapacity. This type of power of attorney might expire upon a specific date or event.
Limited Power of Attorney
In a limited power of attorney, the agent is given the power to act on behalf of the principal for a very specific purpose. This arrangement is commonly used when the principal is out of town and needs someone to sign a document or make a financial decision in their absence. A limited POA is typically terminated at a specified time in the written document.
Durable Power of Attorney
In a durable power of attorney, the agent can be given limited or general power, meaning the agent can be given either (a) the power to complete a specific action on behalf of the principal as in a limited POA or (b) all powers and rights of the principal as in a general POA. However, a durable POA is different because it continues to be in effect after the principal becomes incapacitated. This arrangement can only be terminated if the principal revokes it while he/she is not incapacitated.
Springing Power of Attorney
In a springing power of attorney, the agent is given the power to act for the principal on a limited or general scope. However, a springing POA stands apart from the others because it does not go into effect until the principal becomes incapacitated. With this agreement, it is essential to clearly define the standard for determining incapacity in the written document so that all parties know the exact moment that the springing POA becomes effective.