Principals can choose from several types of powers of attorney. But, generally speaking, there are two different categories of powers of attorney, which include:
- those based on mental soundness and capacity
- those based on the scope of 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 Wyoming, which means a POA automatically remains effective if the principal becomes incapacitated or disabled unless there is express language to indicate that the powers are to end upon the incapacity of the principal.
- 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 takes effect 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. They can also be as broad as granting the agent the power to act in all financial matters for the principal.
The medical 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.