A Comprehensive Guide To Power of Attorney

A Comprehensive Guide To Power Of Attorney

It isn’t easy to imagine, but there will come a day when seniors won’t be able to decide for themselves. At that point, you’ll need to take control of their funds or make decisions regarding their medical care.

If that time ever comes, you may need a durable power of attorney (POA). If you cannot make decisions for yourself or are not physically present, you must have power of attorney. Read more in our comprehensive guide.

What Is A Power Of Attorney?

A power of attorney (POA) is a legal document that appoints a specific person to act on behalf of another. A POA grants the agent or attorney-in-fact the power to act in the principal’s place. The principal’s property, finances, investments, and medical care may be subject to the agent’s decision-making, which may be given broad or limited discretion.

Two main types of POAs, financial and health care, provide the attorney-in-fact with general or limited powers.

The Types Of Power Of Attorney Explained

Before creating your power of attorney, it’s important to learn about the available options. So below are the types of power of attorney according to the AARP.

1. General Power of Attorney

The general power of attorney is a comprehensive authority that gives an agent significant control over the business of a principal. The agent, or the person assigned to act on the principal’s behalf, has several responsibilities. The American Bar Association states that duties involve acquiring or selling real estate and engaging in contracts on the principal’s behalf.

2. Limited or Special Power of Attorney

Limited or special powers of attorney are the best options for someone who wants to restrict the agent’s authority. The extent of the agent’s authority must be specified in as much detail as possible before the limited power of attorney is signed and notarized. It is essential to consult a legal advisor if someone is unsure of what should be covered by the special power of attorney.

3. Durable Power of Attorney

Only when someone wants another person to act on their behalf can they use a durable power of attorney. A non-durable POA expires upon revocation or on the set expiration date. 

When the agent gets incapacitated, the principal would want the POA to continue in effect even if they cannot speak. For instance, a durable power of attorney might be used if the principal goes into a coma but wants the spouse to act as the agent. The POA grants the spouse authority to make choices even if the principle is unconscious.

4. Medical or Healthcare Power of Attorney

The principal reserves the right to select the level of care they would like if they become very ill. In the event of a life-threatening illness, a medical or healthcare POA allows the agent to make decisions on the principal’s behalf. Because they consider that the principal may be too ill to make their own decisions, most health POAs fall under the durable category.

Before selecting an agent in any of the situations above, the principal should consult with counsel. To comprehend what should be included in the document, the principal should also request that the attorney lead them through each step of the notarization process for a power of attorney.

What Does A Power Of Attorney Do?

The POA grants the attorney-in-fact (also known as “agent”) the authority to handle your affairs. Which affairs an attorney-in-fact may handle up until the contract’s expiration or your death depends on the type of POA you designate.

Depending on whose POA you choose, the decision-making authority of an attorney-in-fact takes effect at various periods.

It is needed when a principal is temporarily or permanently ill, disabled, or unable to sign legal documents. According to the American Bar Association, the principal must select a POA they can rely on to manage their affairs.

You can get documents online or via a lawyer. Both parties must sign the contract. In most cases, it needs to be seen by a third party.

As long as the principal is mentally sound, most POA documents allow the agent to act on behalf of the principal in all financial and real estate affairs. According to the Connecticut General Assembly, the Agreement terminates immediately if the principal cannot decide for themselves.

A power of attorney may expire for many reasons, including when the principal terminates it or passes away, when it is declared invalid by a court, or when the agent can no longer fulfill the specified duties. If the principal and agent are married, the authorization can be void when the principal and agent divorce.

Read also: Last Will and Testament: Everything You Need to Know

How To Set Up Power Of Attorney

A POA template can be purchased or downloaded. If you do, make sure it’s for your state, as each has different criteria. This document, however, might be too crucial to rely on the possibility that you received the right form and processed it correctly. The principal’s signature, which starts the POA, must be notarized in many states. Some states additionally demand the notarization of witnesses’ signatures.

Everyone who has to form a POA should be aware of the following restrictions because they often apply nationwide:

  • For each of the 50 states, there isn’t a uniform POA form; state laws and procedures differ. 
  • Not all durable power of attorney is recognized in every state.

Some important powers cannot be transferred. Among them is the capability to carry out the following:

  • Create, alter, or nullify a will.
  • Although a few jurisdictions permit it, most states do not allow you to contract a marriage.
  • Vote (although the guardian may request a ballot on behalf of the principal) (but the guardian may request a ballot on behalf of the principal)

Although the specifics may vary, the following guidelines are valid nationwide:

Put It in Writing

While certain areas of the country allow verbal POA grants, doing so is not a reliable alternative to having your agent get a written copy of every power of attorney you have issued to them. The clarity in writing aids in preventing disputes and confusion.

Use the Proper Format

There are numerous POA shape variations. While some POAs are designed to end when the POA does, others are not. Create a POA tailored to the powers you want to award after deciding which ones. The POA must also meet your state’s criteria. Use the internet to discover a form recognized by a court of law in your state, or seek a local estate planning expert for assistance. Using a lawyer is the best course of action.

Identify the Parties

The principal is the person who authorizes the POA. The agent or the attorney-in-fact is the person granted a power of attorney. Check to see if your state mandates that you use a certain jargon.

Delegate the Powers

A POA may be as comprehensive or specific as the principal desires. Even if the principle gives the agent a generic POA, each power must be specified. The principle cannot offer broad authority, such as “I delegate all matters about my life.”

Specify Durability

The POA expires if the principal becomes incapable in most states. If this occurs, the only way an agent can maintain their authority is if it was expressly stated in writing that it is durable, which makes it valid for the duration of the principal’s life unless the principal revokes it.

Notarize the POA

The notarization of powers of attorney is mandated by many states. If a notary’s seal and signature are on the paper, it may be simpler for the agent, even in jurisdictions that don’t.

Record It

Not all powers of attorney must be formally registered with the county to be valid. But for many estate planners and anyone who wants to make a record that the document exists, recording is a common procedure.

File It

Certain POAs must be submitted to a court or government agency to be legal in some states. For instance, Ohio mandates that the juvenile court receive a copy of any POA used to grant grandparents guardianship of a child.

Additionally, the county where the property is located must record any POA that transfers real estate.


Planning and requesting a durable POA for financial and medical decisions from your elder is a wise move and important part of estate planning.

If a serious health emergency arises, this will spare you, your senior, and the entire family from dealing with serious issues.