Power of attorney in Ohio is substantially similar to most other jurisdictions. This means that there are two types of power of attorney you can assign in Ohio: statutory (otherwise known as financial) and medical. Within those categories, there are several different ways that you can structure your grant of authority. Here’s what you need to know about the power of attorney categories in Ohio.
A financial advisor can help you understand which power of attorney can serve your needs.
Two Types of Agency
As with most, if not all, jurisdictions, Ohio has two broad categories for power of attorney:
Statutory/Financial
The first category is known as statutory power of attorney, or “financial” power of attorney. This is the most common version, and it grants an agent the authority to conduct legal and financial transactions on your behalf.
At its most broad, a statutory power of attorney can be an almost unlimited grant of authority. Your agent can move and spend your money, buy and sell assets in your name, interact with government agencies, sign binding contracts on your behalf and otherwise act as if they were you. While there are some limits, for example your agent cannot sign a marriage license in your name or modify your will, they are relatively few.
Statutory power of attorney has broad applications. It is useful in some situations for jobs you don’t want to do personally, such as granting your accountant agency to file your taxes. It is also useful for matters that you cannot personally attend to, such as handling a property sale if you aren’t around. For estate planning, it is particularly useful for letting trusted third parties handle your affairs if you suffer mental decline.
Medical
The second category is known as medical power of attorney. This is particularly common in estate planning and living wills.
With this grant, an agent has the authority to make medical decisions on your behalf. It applies only when you are incapacitated or otherwise unable to make your own choices. In practice, this almost always means that you are unconscious or similarly non-responsive, as doctors try to avoid substituting their judgment for a conscious patient’s. However, in some extreme situations, such as if you are under the influence of heavy medication, a doctor might accept a medical agent’s decisions in place of your own.
Most, if not all, adults should have a living will in which they nominate a medical power of attorney. It can be essential in the event of a medical emergency, so that doctors know who will make decisions on your behalf in a fast-moving situation.
Duration of Authority
The first subcategory of agency is the duration of the grant. Broadly, there are three durations for assigning a power of attorney. Note that in all circumstances, you can freely revoke power of attorney at any time. A power of attorney grant also always ends with the principal’s death.
Non-Durable/General
This is the default duration for a power of attorney.
Under this grant of authority, your agent retains power until one of three conditions are met:
- You revoke the grant, or
- The grant ends as written, or
- You become incapacitated or legally incompetent
When you make your grant of authority, it will end on any date or condition that you specify. For example, say that the assignment states “this grant ends on April 16” or “this grant ends on the sale of 123 Main Street.” The power of attorney would end completely on April 16 or once the papers are signed to sell 123 Main Street, respectively.
If you do not specify an end condition in the assignment, the power of attorney grant remains in effect until it is ended. This can happen under three conditions: First, you can revoke power of attorney at any time. This is true for all power of attorney assignments. Second, a non-durable assignment will end immediately if you are ever incapacitated or declared legally incompetent. Third, and finally, it will end at your death.
Durable
Durable power of attorney operates the same way as general power of attorney in that the grant operates indefinitely, until you revoke it, or until the authority expires.
However, durable power of attorney does not end if you are incapacitated or incompetent. It continues regardless of your mental state. This makes durable power of attorney particularly useful for estate planning, as it allows you to prepare against the possibility of mental decline. In fact, many people prepare a power of attorney form specifically in case they lose competence, so that a trusted third party can help manage their finances and life.
Springing
Springing power of attorney does not refer to when the grant ends but rather when it begins.
With a springing grant, the power of attorney doesn’t take effect until certain conditions are met. The most common use for springing power of attorney is to have a durable grant that takes effect in the event that you become incapacitated or incompetent, so that someone can immediately take over your legal, financial or medical affairs.
This grant can be general or durable.
Scope of Authority
The second subcategory is the scope of the grant. This typically only applies to statutory power of attorney, not medical, as the medical grant is generally self-contained.
There are two basic categories.
General
A general power of attorney gives your agent all possible legal rights. This allows them to make almost any legal or financial decision on your behalf. This can include banking, contracts, property sales and many other matters. There are a few statutory limits on this authority, but not many.
Unless you specify otherwise in the assignment document, a power of attorney grant is assumed to be general. While this authority is vast, the most important limit is that your agent cannot directly contradict your instructions on any matter or prevent you from revoking the power of attorney grant.
A general grant is most useful for estate planning. This is the authority you might want to protect yourself against mental decline, so that someone can help with most areas of your life.
Limited/Special
A limited grant gives your agent a specific and limited set of legal rights.
With this grant, your agent has only the specific scope of authority you give them. Perhaps the most common example is if you give an accountant power of attorney to file your taxes. This gives them the authority to work with the IRS on your behalf, receiving and filing documents with your authority, but they have no authority outside of that specific transaction.
A limited grant refers to when you enumerate a specific scope of authority, for example the authority to manage your banking or property transactions. A special grant refers to when you enumerate authority to conduct a specific transaction, such as the example above of filing taxes. If you specify any limit in your assignment document, the power of attorney grant is assumed to be limited to it alone.
Limited power of attorney authority can overlap with duration. If your grant gives only specific powers for a limited transaction, the authority will end once this transaction is complete.
Bottom Line
Ohio uses the same basic structure for power of attorney as most jurisdictions. You can assign statutory or medical, and you can base this agency on your specific needs and duration. Before establishing a power of attorney, make sure you assess your personal and financial situation, consider the scope of authority you want to grant and consult with a legal professional to comply with the necessary documentation and state laws.
Tips for Estate Planning
- A financial advisor can provide valuable guidance when drafting a POA so that it aligns with your specific needs and circumstances. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Leaving money to an heir who isn’t good with money can be worrisome. A spendthrift trust is an estate planning tool that could help, giving a trustee control over how the funds are used by the beneficiary.
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