Understanding the Different Types of Power of Attorney: What You Need to Know
Dec. 3, 2025
Planning for the future often includes making decisions about your finances, healthcare, and property. One way to prepare for situations in which you may not be able to act for yourself is to grant a power of attorney (POA). A power of attorney allows you to appoint someone you trust, called an agent or attorney-in-fact, to make decisions on your behalf.
At the Law Office of Keith D. Peterson, CPA, J.D., I help clients throughout Northwest Houston, Texas, create powers of attorney that meet their individual needs. Understanding the different types of POAs can help you make informed choices, whether you’re dealing with real estate matters, financial planning, or healthcare decisions.
A power of attorney isn’t one-size-fits-all. Each type has a unique purpose and level of authority, designed to meet different personal and legal needs. By understanding how these types work together, you can create a strong legal foundation for future peace of mind. Contact me today for more information.
General Power of Attorney
A general power of attorney grants your agent broad authority to handle your financial and personal matters. It’s often used when you want someone to manage your affairs comprehensively while you’re available or temporarily unavailable. Some of the ways a general power of attorney can help include:
Financial transactions: Your agent can handle banking, investments, and real estate purchases or sales. This helps maintain your assets and prevents financial disruptions.
Bill payments and debt management: The agent can pay bills, manage loans, and settle financial obligations to protect your credit and finances.
Business operations: If you own a business, your agent can make day-to-day decisions or sign contracts to keep things running smoothly.
A general power of attorney provides convenience but should be used with care, as it grants significant authority. When working with my clients, I make sure you understand the scope of power granted and confirm that your real estate and financial interests are clearly protected.
Durable Power of Attorney
A durable power of attorney remains in effect even if you become incapacitated. It’s a powerful planning tool for those who want to make sure their financial and real estate matters continue without interruption. The agent for a durable power of attorney can handle:
Real estate transactions: Selling, managing, or maintaining property when you can’t act personally helps preserve your investments.
Investment accounts: Overseeing portfolios or making decisions about asset allocation keeps your financial goals on track.
Medical billing and insurance claims: Handling these responsibilities confirms timely payments and avoids coverage issues.
Durable powers of attorney offer long-term security. I help clients draft durable POAs that clearly define their agent’s authority to make sure their financial and real estate needs are handled smoothly, even in unforeseen circumstances.
Limited Power of Attorney
A limited power of attorney allows your agent to act on your behalf for a specific purpose or period of time. This type of POA is beneficial when you’re unavailable for certain transactions or legal matters. A limited power of attorney can be used for:
Real estate closings: Authorizing an agent to sign documents for a property sale or purchase while you’re away, which can prevent transaction delays.
Temporary financial management: Allowing someone to handle accounts or investments while traveling or on military service.
Legal representation: Granting authority for one specific case or contract, which allows for these matters to be handled professionally without broad authority.
Limited powers of attorney are narrow in scope, making them a safe and effective option for short-term situations. By tailoring these documents, I help my clients complete real estate and financial tasks while keeping full control over their other affairs.
Healthcare Power of Attorney
A healthcare power of attorney, also known as a medical POA, allows your chosen agent to make healthcare decisions when you’re unable to do so. It’s an essential part of protecting your wishes regarding treatment and medical care. Under a healthcare power of attorney, you can establish provisions for medical and life-saving care, such as:
Treatment decisions: Your agent can consent to or decline procedures in accordance with your expressed preferences. This keeps medical choices aligned with your values.
Medication management: Your agent will be responsible for overseeing prescriptions and treatments to make sure your care continues smoothly.
Long-term care decisions: You agent will have the responsibility of choosing rehabilitation centers, home health services, or nursing homes in accordance with your wishes.
A healthcare POA empowers your loved ones to act with confidence during medical emergencies. When paired with an advance directive, it creates a complete plan for your well-being and helps prevent confusion among family members or healthcare providers.
Springing Power of Attorney
A springing power of attorney is activated only when a specific event occurs. This is most often a period of incapacity. It’s useful for those who want to retain complete control until they’re no longer able to act for themselves. An agent for a springing power of attorney can handle:
Real estate management: You can authorize your agent to sell or manage property if you’re incapacitated to protect your investments.
Banking and investments: You can allow your agent to access funds or manage portfolios during incapacity to protect your financial stability.
Legal matters: You can enable your agent to sign documents or handle insurance claims to prevent missed deadlines and complications.
Springing POAs provide flexibility, but they must be drafted carefully to avoid disputes about when they take effect. As an experienced attorney, I help my clients define triggering conditions clearly to provide them with confidence that their real estate and financial interests will be handled according to their wishes.
Financial Power of Attorney
A financial power of attorney focuses on managing your money, property, and investments. It can be durable or limited, depending on your needs, and is one of the most practical documents for everyday financial management.
Managing real estate investments: Your agent can buy, sell, lease, or oversee property maintenance to protect your assets.
Paying taxes and bills: Handling mortgages, utilities, and other expenses prevents financial stress and penalties.
Overseeing investments and retirement accounts: Making strategic decisions about stocks, bonds, and savings keeps your financial plan on course.
This type of POA confirms your financial obligations are met and opportunities aren’t missed. I help clients customize financial POAs to provide clear instructions and safeguards for managing real estate and personal assets responsibly.
Revoking or Updating a Power of Attorney
As your life changes, your power of attorney should evolve too. You can revoke or modify your POA at any time while you’re mentally capable. Some reasons for a revocation or an update include the following:
Change in agent: You may need to select someone new if your relationship changes or your current agent becomes unavailable.
New property or investments: Adding new real estate or assets might require expanding the scope of your POA.
Marriage, divorce, or relocation: Significant life changes may alter who should have authority or how documents are recognized.
Updating your POA helps prevent confusion and outdated instructions. I guide clients through revocation and replacement so that banks, hospitals, and real estate professionals always have accurate records.
Reach Out to an Experienced Estate Planning Attorney in Houston, Texas
Understanding the different types of power of attorney is essential for protecting your interests in real estate, finances, and healthcare. Located in Houston, Texas, my firm is committed to helping clients throughout Northwest Houston create powers of attorney tailored to their needs.
By selecting the correct type of POA and a trusted agent, you can maintain control of your affairs and feel confident about the future. Reach out to me at the Law Office of Keith D. Peterson, CPA, J.D., today to discuss your options and plan with confidence.