When planning for the future, individuals often encounter terms and instruments they’re unfamiliar with. Among these are the financial power of attorney and the medical power of attorney. Although both deal with appointing agents to make decisions on one’s behalf, they serve distinct purposes and are governed by different Colorado laws. Here, we’ll unpack the differences between these two crucial documents to provide clarity for Colorado residents.
What is a Financial Power of Attorney?
A financial power of attorney, sometimes referred to as a “general power of attorney,” is a legal document that allows an individual, referred to as the “principal,” to designate another person, the “agent,” to manage their financial affairs.
This can encompass various activities, such as handling bank transactions, paying bills, managing real estate transactions, and overseeing investments.
The powers granted can be broad or limited, depending on the principal’s wishes. For instance, a principal might only grant their agent power to pay their monthly bills, or they might confer more sweeping financial authority.
What is a Medical Power of Attorney?
On the other hand, a medical power of attorney in Colorado, often referred to as a “health care proxy” or “health care surrogate,” is a document wherein the principal designates an agent to make healthcare decisions on their behalf when they cannot do so. This could arise when the principal is incapacitated due to illness, injury, or another medical condition. As stipulated by the principal, the designated agent has the authority to make decisions regarding medical treatments, surgical procedures, and other healthcare matters.
- Purpose: The core difference is the realm of decision-making. A financial power of attorney deals with economic matters, while a medical power of attorney deals with health-related decisions.
- Duration: Unless otherwise stated, a financial power of attorney in Colorado might be effective immediately upon signing, while a medical power of attorney only becomes effective when the principal is declared incapacitated by a physician.
- Revocation: The principal can revoke Both powers of attorney at any time, so long as they are mentally competent. However, the procedures for revocation may vary.
- Legislation: While both are recognized in Colorado, they are governed by different statutes. Financial power of attorney falls under the Colorado Uniform Power of Attorney Act, while the Colorado Medical Treatment Decision Act regulates medical power of attorney.
Recognizing the distinct roles and legal implications of the financial and medical powers of attorney is essential. When considering these tools as part of comprehensive estate planning, it’s imperative to consult with legal professionals who deeply understand Colorado’s specific guidelines and statutes.
If you or a loved one is navigating the complexities of estate planning, the team at Baker Law Group is here to guide you. As experienced Colorado Estate Planning Attorneys and Denver Estate Planning Lawyers, we provide expert counsel tailored to your unique needs. Secure peace of mind for your future with Colorado Estate Planning; contact us today to start the conversation.