A power of attorney is a legal agreement that permits someone else to act legally on your behalf in certain ways. This can be extremely beneficial, whether you’re preparing to travel internationally, have concerns about your health, or are in the process of planning your estate. But the extent to which they can do so will vary on the type of power of attorney that you choose. Below are a few questions to help you determine which kind of power of attorney you need.

Should the power of attorney be limited to certain situations (e.g., only when you are out of the country)?


A limited power of attorney, sometimes called a special power of attorney, severely restricts the agent acting on your behalf. It’s set up for a limited period of time or to last only for particular actions. Sometimes they only become effective in particular situations, which is referred to as a “springing” power of attorney. It can be utilized to handle certain affairs when you can’t handle them yourself due to prior commitments or illness. For example, you may be out of the country during the process of selling real estate or handling a U.S. securities transaction; limited power of attorney would allow the agent only to act on your behalf in just that real estate or securities transaction in particular, and only for as long as you were out of the country. The agent does not have access to the rest of your financial, business, or medical affairs.

Does the power of attorney need to be effective when you are mentally or physically incapable of making decisions?

This is an incredibly important consideration, especially if you’re in the process of planning your estate. A non-durable power of attorney is only effective only for as long as you are alive and sound of mind. If you become incapacitated, that power of attorney is revoked. However, a durable power of attorney will be effective in the appropriate circumstances, no matter what. It can even be written to go into effect upon your incapacitation.

Are you selecting a power of attorney to handle medical decisions on your behalf?


A medical power of attorney is a type of durable power of attorney that allows a specific person to make medical decisions on your behalf should you become mentally or physically incapable of doing so. This could be due to injury, illness, or the natural aging process. It’s important to understand that your medical power of attorney will only have control over your medical care — the person will not automatically be granted control over your financial or business affairs.

Are you selecting a power of attorney to handle financial affairs on your behalf?

personal financial palnning

A financial power of attorney can be either durable or non-durable. This type of power of attorney is specifically given access to all of your financial affairs — including collecting benefits, making investments, buying insurance policies or annuities, managing your retirement accounts, and claiming or selling property — so you need to be sure you select your agent carefully. A family member may not be the best choice, since they may need to navigate complicated financial situations; this is especially true if you’re utilizing this as a part of your estate planning, and your family will already be under a great deal of emotional stress. If you’re utilizing it as a durable financial power of attorney, you may also want to make it a “springing” type so that it only goes into effect when you become incapacitated.

Mark Schottler is a Chicagoland attorney with over 20 years of experience working both in probate and estate planning law and in real estate law. He puts his extensive knowledge on these subjects into easily consumable articles that will help and advise the public. Mark Schottler has a passion for probate and uses this to create relevant articles that are informative and entertaining. *While these posts may detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.