Principals can choose from several types of powers of attorney. But, generally speaking, there are two different categories of powers of attorney:
- those based on mental soundness and
- those based on what they do and don’t cover.
Capacity-Based Powers of Attorney
Protecting assets if someone becomes incapacitated is one of the main reasons for creating powers of attorney. That’s why many POAs are designed based on the capacity of the principal.
- Durable Power of Attorney. Here, the principal intends for the authority granted to the agent to continue even after they become incapacitated. Durability is presumed in South Carolina, which means a POA will automatically remain effective if the principal becomes incapacitated or disabled.
- General Power of Attorney. A general (or “non-durable”) power of attorney can only be created when the principal is competent. If the principal becomes incapacitated, the POA is no longer effective.
- Springing Power of Attorney. Here, the POA only becomes effective if the principal becomes disabled or incapacitated. It’s also sometimes called a “standby” power of attorney.
Scope-Based Powers of Attorney
These powers of attorney are confined to a specific task or situation. They can be as narrow as a POA to sell a specific piece of property or asset. Or, they can be as broad as granting the agent the power to act in all financial matters for the principal.
The medical or health care power of attorney is perhaps the best-known scope-based power of attorney. This document grants the agent the power to make medical decisions on behalf of the principal. Typically, this is when principals cannot make those decisions themselves.