Difference Between Durable and General Power of Attorney

The Main Difference Between Durable Power of Attorney and General Power of Attorney is that a Durable Power of Attorney remains valid even if the principal becomes incapacitated, whereas a General Power of Attorney automatically ceases to be effective under the same circumstances.

What is Durable Power of Attorney and What is General Power of Attorney?

Durable Power of Attorney (DPOA) grants an individual, known as the agent or attorney-in-fact, the authority to act on behalf of another person, known as the principal, in various matters. The defining characteristic of a DPOA is its persistence; it remains effective even if the principal suffers incapacitation. This could involve making financial decisions, managing property, or executing legal documents when the principal is no longer able to do so.

General Power of Attorney (GPOA), on the other hand, allows the agent to make a broad range of decisions on behalf of the principal. These decisions can encompass financial, legal, and personal matters. The critical limitation of a GPOA is its dependency on the principal’s competence. If the principal becomes incapacitated, the authority granted through a General Power of Attorney immediately ends.

Key Differences Between Durable Power of Attorney and General Power of Attorney

1. Duration of Effectiveness: A Durable Power of Attorney remains in effect if the principal becomes incapacitated, while a General Power of Attorney ends under the same conditions.
2. Revocation: Principals can revoke both types of powers of attorney, but a General Power of Attorney can automatically terminate if the principal loses mental capacity, whereas a Durable Power of Attorney does not.
3. Scope of Authority: The authority in a General Power of Attorney is usually wide-ranging yet bound by the principal’s mental capacity. A Durable Power of Attorney maintains its scope regardless of the principal’s health status.
4. Legal Validity: In many jurisdictions, a Durable Power of Attorney must explicitly state that it is intended to remain in effect despite the principal’s incapacitation. The General Power of Attorney does not have this requirement.
5. Use Cases: A Durable Power of Attorney is often used for long-term planning, such as estate planning and ongoing financial management. A General Power of Attorney is more suited for temporary in-capacity situations or short-term delegations.
6. Creation of Document: Both forms require formal legal documentation, but the creation of a Durable Power of Attorney often involves more explicit language regarding its durability during incapacitation.
7. Health Care Decisions: A Durable Power of Attorney often includes authority over healthcare decisions, while this is less common for a General Power of Attorney.
8. Notification: It is advisable to notify relevant parties when either type of power is granted or revoked, but the urgency may vary depending on the specific needs directed through a Durable versus General Power of Attorney.

Key Similarities Between Durable Power of Attorney and General Power of Attorney

1. Appointment of an Agent: Both types allow the principal to appoint an agent to act on their behalf in various matters.
2. Written Document: Creation of both requires a formal, written, and often notarized document.
3. Financial Decisions: Both types typically provide the agent with the power to make financial decisions.
4. Legal Authority: Legal standing is conferred to the agent or attorney-in-fact by both types.
5. Personal Decisions: Both may involve the authority to make certain personal decisions for the principal.
6. State-Specific Laws: Both are subject to state-specific laws and guidelines governing their use and limitations.
7. Multiple Agents: Both types can appoint multiple agents, either simultaneously or successively, to provide a backup in case the primary agent is unavailable.

Comparing Features of Durable Power of Attorney and General Power of Attorney

1. Incapacity Clause: A Durable Power of Attorney remains in operation even if the principal becomes incapacitated. By contrast, a General Power of Attorney ceases to be in force if the principal loses capacity.
2. Medical Decisions: Durable Power of Attorney often includes the authority to make healthcare decisions, providing a comprehensive plan for the principal’s well-being. General Power of Attorney typically excludes these permissions, limiting its scope mainly to financial matters.
3. Financial Authority: Both types offer financial authority, but a General Power of Attorney confines its power only while the principal is capable. Durable Power of Attorney sustains this power regardless of the principal’s health.
4. Long-term Planning: Durable Power of Attorney is particularly suitable for long-term planning, like managing estate and ongoing financial matters. General Power of Attorney is generally used for short-term or immediate needs.
5. Formal Requirements: Creating either type involves legal documentation. However, a Durable Power of Attorney usually requires clear language stating its sustainability despite the principal’s incapacitation.
6. Revocation Terms: Both documents can be revoked by the principal. Yet, a General Power of Attorney can also get terminated automatically if the principal becomes incapacitated, while a Durable Power of Attorney does not.
7. Purpose and Scope: General Power of Attorney acts on a wide range of matters but is more temporary. Durable Power of Attorney is explicitly for ensuring continuity during health-related issues.
8. Agent’s Role: Both types enable the principal to appoint an agent. The agent, however, holds the role with more assured continuity under a Durable Power of Attorney.