When and How to Give Someone the Authority to Help
A power of attorney (POA) is a legal document that gives someone else the legal power to act on your behalf to make certain kinds of decisions or financial transactions for you when it is impossible or inconvenient for you to do them yourself. The other person does not have to be a lawyer, though it is not at all unusual to use one for this.
The most common power of attorney is the financial or “general” power of attorney authorizing someone you trust to handle your financial and business affairs. You could be somewhere in Europe or Africa and need someone to sign papers for you at home. While you might be in touch by phone, you couldn’t be physically present to close the deal.
The general financial power of attorney authorizes the other person to attend to all your affairs: collecting money, paying bills, buying property, selling property and so on. Or it may be narrow in scope authorizing a single transaction such as the sale of a particular piece of property and nothing else. Whatever the scope of the power of attorney, it is wise to put in a date when it will terminate and end the other person’s authority.
Another common kind of power of attorney is the health care power of attorney. It is also called an advance health care directive or living will. It authorizes the other person to make medical decisions for you when you are unable to make them or communicate them yourself. It is now part of hospital admissions routine to ask patients if they have a health care power of attorney. It is also used to give end-of-life instructions. Persons who are terminally ill and near death can give instructions in advance to either stop life-sustaining treatment or to continue it.
The third kind is called the durable power of attorney. It is not so much a separate category as a feature or option of the other kinds. By adding special language an ordinary power of attorney will not terminate when the person who created it becomes disabled. The health care power of attorney could not function without this feature. It is also a common feature of the general, financial power of attorney. If you are going to be out of the country, you may well want your power of attorney to still be effective even if you should be ill or otherwise disabled.
In each case, the person who holds your power of attorney has the duty to handle your affairs as you direct or in your best interest. They do not have the authority to take actions that are against your wishes.
An attorney can help you decide what kinds of power of attorney you need for your specific situation, and help you word it so that all your concerns are addressed.
People often start thinking of powers of attorney when they see elderly parents begin struggling to keep up with bills or a loved one undergoing a serious and debilitating medical treatment. A power of attorney can be appropriate in other situations too. If you send your daughter out of state to your brother’s family for the summer, for example, it might be wise to give him a health care power of attorney so he can get her medical attention in an emergency.
Even in this country, life can take unexpected turns. Emergencies happen. Many people who are not sick or elderly consider it smart to have a health care power of attorney so that a trusted friend or relative can make medical decisions for them if suddenly they cannot. The same people also have durable financial powers of attorney to prevent a heath emergency from snowballing into a financial emergency because of late mortgage and other payments.
Three important additional facts about powers of attorney are:
A power of attorney, even a durable one, ends when you die. It is not a substitute for a will, so it is a good idea to have both (See Writing Your Will elsewhere on this website.)
A power of attorney is not the same as guardianship or custodianship. Guardianship and custodianship are authorities granted by a probate court when it can be proven that you are not competent to make decisions or handle affairs yourself. A guardian must act in your best interest but does not have to follow your instructions when the court determines that you are not competent to make decisions.
You may end, or revoke, a power of attorney at any time, for any reason, as long as you are of sound mind. You can name a different person if you wish, or cancel it completely. To revoke a power of attorney, write a statement that includes the date the power of attorney was created, your wish to revoke it, a statement that you are of sound mind, your name, the date you are writing this revocation, and your signature. Send a copy of the statement to everyone who has a copy of the power of attorney so they will know that you have revoked that person’s authority to act for you.
Attorneys who handle probate or eldercare cases are very experienced helping people think about what they need and how they can get it when selecting someone as power of attorney. In addition, if you anticipate receiving money from a trust, Social Security, or a pension, you should talk with an attorney about long-term planning. And don’t forget that making a will is the way to make sure your wishes are followed after you die.
Related Legal Terms
Agent – a person granted authority to act for a person under a power of attorney
Principal - a person who grants authority to an agent in a power of attorney
Attorney-in-Fact – means the same as agent
Incapacity – the inability to effectively manage property or business affairs because the person is impaired by mental illness, physical illness or drug or alcohol abuse such that he or she lacks the ability to receive and evaluate information or make or communicate decisions regarding his or her property or business affairs, or is missing, in prison or outside the United States and unable to return.
Power of attorney – a written or other record that grants authority to an agent to act in the place of the principal.
Durable – not terminated by the principal's incapacity
For an attorney who can draw up POA documents
This is for general information only. It is not intended as legal advice.