Your power of attorney

What to know about your power of attorney

by David Chandler, Ph.D. ConsumerAffairs Research Team
Person signing document


Few prospects are quite as daunting as managing your estate, especially if you know you cannot completely manage your affairs all the time. There are many reasons this could happen, from running a business abroad that requires your legal presence to declining mental or physical health that would necessitate someone speak on your behalf.

For such reasons, you may want to consider granting someone you trust power of attorney to act as a sort of “second you.” Anyone acting in your stead with your power of attorney can sign legal documents in your name, essentially serving as your proxy in the event that you can’t do it yourself.

Power of attorney (POA) is an important part of anyone’s estate plan; however, granting someone power of attorney is not a decision to make lightly. It involves a great deal of trust, and there are subtle differences in types of POA that you should you take into consideration. Understanding exactly what it means to grant someone POA is key before giving someone else control of your finances, medical decisions or any other legal facet of your life.

Man on laptop


To prepare for this guide, I spent over 32 hours on researching POA. I read 35 online articles, and I consulted four e-books on the subject.

Unsigned legal document

What is power of attorney?

A power of attorney is essentially a legal document used to grant someone else the ability to make legal decisions and sign documents on your behalf. You, the “principal” choose someone to act as your “agent,” also called “attorney in fact,” to perform certain legal duties in your stead.

The most common types of POA involve a principal giving their agent legal power over decisions regarding health and finances, typically in separate documents. As principal, you get to set the parameters and limitations in the power of attorney document. Power of attorney is rendered ineffective if the principal dies or becomes otherwise incapacitated (either through injury or mental illness). The exception to this rule is durable POA which gives the agent legal authority until the principal’s death. This type of POA is discussed in-depth in a later section.

Person using dictionary

Basic terms for power of attorney

As with any other legal dealings, there are a few terms worth knowing when working on your POA. Here is a glossary of words and phrases that can clarify some of the technical language as well as a list of types of POA.

  • Principal: The principal is the person granting power of attorney to their chosen representative. It is up to the principal to make sure their agent is trustworthy and has the principal’s best interest in earnest.
  • Attorney in fact: The attorney in fact, or agent, is the individual granted power of attorney by the principal. An attorney in fact’s duties include keeping detailed and honest records, avoiding conflicts of interest and keeping their funds separate from the principal’s.
  • General power of attorney: A general POA is, as its title states, a broad document that gives the attorney in fact legal authority over most of the principal’s legal decisions, like financial and medical decisions.
  • Special power of attorney: Special POA grants the attorney in fact legal authority over certain legal decisions. For instance, you can grant financial power of attorney to one person and medical power of attorney to someone else; each requires a separate document and filing.
  • Financial power of attorney: Financial POAs a special type of document that grants your attorney in fact legal control of your financial duties such as paying taxes, paying bills, investing in stocks and bonds, purchasing or selling real estate, collecting benefits and managing retirement accounts. If you operate a business, your responsibilities can be given to your attorney in fact.
  • Limited power of attorney: Limited POA can set stricter parameters over the attorney in fact. This can involve granting POA over a limited amount of time, or it could be granting legal power over a certain aspect of the principal’s assets. Limited POA is most often used in businesses when the principal will be temporarily absent from their business and unable to monitor their finances, and thus needs to grant legal authority to an aide or partner.
  • Durable power of attorney: Durable POAs, also called “enduring power of attorney,” remain in effect until the principal’s death. This type of POA is usually part of an estate plan.
  • Springing power of attorney: A springing POA is a type of durable POA that comes into effect after certain conditions are met. In most cases, these conditions are set when the principal becomes incapacitated. The principal specifies these conditions in the document.
Person holding legal documents

A note on durable power of attorney

As indicated earlier, power of attorney expires when the principal either dies or is rendered unable to make legal decisions due to injury or mental illness. However, a person can grant a durable power of attorney to their agent. This type of POA gives the agent broad control over the principal’s assets until the principal’s death.

Granting someone durable POA is not a decision to be made lightly under any circumstance. In most cases, durable POA is part of a larger estate plan. If you are thinking of setting a durable POA, make sure you specify the conditions under which POA should take effect, as well as the limitations (if any) of the POA.

For example, if you are in ill health, you can set up a durable medical power of attorney in the event that you are unable to make conscious medical decisions. You can, by electing to draft a springing POA, specify when the POA will be in effect and what kind of medical decisions are granted to your attorney in fact.

It is important to note, too, that durable POA is a different document from a living will. Your living will contains your wishes specifically in the event that you are no longer of sound mind or body to make medical decisions. A living will covers specific medical events, such as “do not resuscitate” orders in the event of terminal illness or severe brain damage. A durable POA for healthcare invests your agent with the authority to make any sort of medical decision for you, not simply limited to deathbed concerns. Because both of these documents can remain in effect at the same time, you may want to prepare both with a lawyer to ensure that the legal language is clear in each document.

Legal document on desk

Granting power of attorney

The process of granting someone power of attorney is fairly straightforward. To grant someone POA, the principal must first fulfill the following criteria:

  • The principal must be at least 18 years old.
  • The principal must be willing to give power of attorney to a person designated in their document.
  • The principal must be of sound mind. This means that the principal must understand the documents she or he is signing, the powers that are being granted and when the document comes into effect.


If you meet these requirements, the other steps are easy.

  1. Choose your attorney in fact. This step can often be the most difficult because it invests a good bit of trust in the person who can act as your legal double. Make sure your agent is someone you know is dependable and someone who will always have your or your business’ well-being in mind when making legal decisions.
  2. Draft the POA. Some specific requirements for POA vary across states, but the main criteria listed above are always standard. Many people draft their POA with an attorney to make sure these requirements are met. If you do not wish to meet with an attorney, you can fill out a POA form; your state should have a form available online or at your county courthouse.
  3. Decide the specifics of your POA. As you draft your document, explain exactly which powers--medical, financial, etc.--you want to grant to your agent. You also need to designate when the POA will take effect. Your attorney could help you with these decisions.
  4. Go through the proper filing process. A POA must be signed, witnessed, notarized and then recorded at the courthouse of your county of residence.


The most difficult tasks are choosing your agent and deciding on the specific parameters and limitations of your POA. Again, a lawyer will be able to help you if you run into any problems.

People setting up POA

Frequently asked questions about power of attorney

When should I make a durable POA?

It’s never too soon to start an estate plan. Setting up a durable POA in the event of serious illness or tragic accident is a good contingency plan to make sure your assets are in good hands.

Who relies on my POA?

For a financial POA, you will need to send a copy of the document to your bank, brokerage firm, creditors and to anyone with whom you do business. Some financial institutions, however, require you to fill out their own POA forms and will not accept general POA documentation.
For a medical POA, you will need to give POA documentation to you doctor, your immediate family and any hospital or treatment center that may need to know of your POA.

Can I make changes to my POA?

As long as you are legally of sound mind, most states will allow you to revoke POA. Should you decide to revoke POA, it is important to notify all parties immediately. An agent who is ignorant of a revoked POA can still rely on it.

Can I appoint more than one agent?

You can appoint multiple people as co-agents. Depending on your circumstances, it may even be a good idea to designate more than one agent in the event one cannot serve as attorney in fact. Should you decide to appoint more than one agent, you will need to clarify in the POA exactly how they must act together and how any disputes should be resolved in case they arise.

Is my attorney in fact liable for misconduct?

An attorney in fact is essentially a legal double as far as your POA is concerned. However, you or someone close to you can file a suit against your agent if you think they engaged in willful misconduct or gross negligence with your assets. These legal proceedings are often difficult, which is why you should make sure your attorney in fact is someone you can trust completely.

Can I use a generic POA form?

If your state allows for generic forms, they are fine to use to draft a POA as long as you follow the correct legal procedures. However, granting someone POA often entails very specific issues that may not be covered on a general form. Make sure you know exactly what you want covered in your POA to make sure your assets and interests are covered. A general POA form will often work, but you have to make sure it suits your needs first.


Power of attorney


It bears repeating that granting someone power of attorney is not a task to take lightly. It invests in someone a good bit of legal power over your finances, your health or any other aspect of your life you want to designate. If you want to have business assets looked after while you’re indisposed or if you are preparing an estate plan, having someone look after your legal interests is an important consideration. Just make sure your agent’s duties are outlined clearly in the POA before making any final decisions, and always make sure you legal assets are in the hands of someone you trust.

Did you find this article helpful? |
Need legal services?
by David Chandler, Ph.D. ConsumerAffairs Research Team

David Chandler, Ph.D., writes for the ConsumerAffairs Research team to help consumers make smart purchasing decisions. David is passionate about creating content that is useful and informative, and he devotes several hours to researching companies, industries and articles for each piece of content he writes to help consumers find what they need.