A power of attorney is a document through which you designate another person, or agent, to act on your behalf in very specific situations. This document is used in circumstances where a health care decision must be made or a financial transaction completed, but you incapacitated or unavailable to handle the matter yourself. Once you have given a power of attorney to someone, you may later revoke it.
A limited power of attorney provides you with the ability to grant a restricted set of powers to an agent. The powers granted may be broad or narrow, and you direct what the document should include. As an example, a limited power of attorney can be used to allow another person to sign your tax returns, or to act on your behalf by running your business or by paying your bills.
A durable power of attorney grants very broad powers to your agent to exercise any power that you would have yourself, which can either start at signing or in the event that you become incapacitated. Essentially, this document grants another person the power to represent your interests and sign on your behalf during any period of your incapacity. With a durable power of attorney, your agent may act for you by purchasing or selling assets, including stocks and bonds or real estate, or access your bank account to pay monthly bills. In cases where a person becomes incapacitated without a durable power of attorney, a conservatorship proceeding may be necessary to handle their affairs.