Nobody wants to think about a time in their life when they will be unable to take care of themselves, but it is something that everyone should plan for. One of the ways to plan ahead is to create a power of attorney. In fact, you may want to create multiple powers of attorney.
To do this, you need to understand the different types and how they work. Money Crashers explains there are two types of powers of attorney: limited or general.
Limited
Your power of attorney gives another person the ability to make decisions for you if you cannot do so for yourself. With a limited POA, the decision-making powers only apply to specific types of situations. It may also specify specific details about when the POA is valid and other restrictions on the power you grant through this document. Basically, a limited POA gives you a lot of control over what the agent can and cannot do.
General
A general POA, on the other hand, is broader in that it provides unrestricted abilities to your chosen agent. When you have this type of POA, the agent can make any and all decisions for you without restrictions. This person is able to decide everything from what happens with your medical care to how to handle your finances.
For this type of POA, you really need to choose your agent carefully. You are giving this person a lot of power over your life. You want to be sure it is someone you can trust and who values you enough to make decisions that are in your best interests.
