Power of Attorney (POA): Durable, Medical, Financial & More

A power of attorney is a legal document giving someone (the "agent" or “attorney in fact”) the authority to make legal, financial or medical decisions for someone else (the “principal”). Designating a power of attorney can ensure your wishes are fulfilled if you become temporarily or permanently incapacitated^[0]

• You can typically choose any adult — including a spouse, adult child, sibling or even a trusted friend — to act as your legal agent under power of attorney. 

• An agent has a fiduciary duty, meaning they’re legally bound to make decisions in the principal’s best interest.

• You can give one person power of attorney or split the responsibilities among multiple people, called dual power of attorney. 

• Consider naming a backup, called a successor agent, if your primary agent is unavailable.

• Power of attorney laws can differ from state to state, so check your state’s rules before drafting your document.

What happens if I don’t have a power of attorney?

Most states recognize your spouse as a medical decision-maker if you become incapacitated and don’t have a medical power of attorney in place. If you don’t have a spouse, your parents or adult children may be contacted.

In extreme cases, if you don't have an agent and become incapable of managing your personal or medical affairs, a court could appoint a conservator to make decisions for you. Court intervention can be public, and although the conservator is required to act in your best interest, there's no guarantee that a conservator would act as you wish.

» MORE: Best online will makers

What decisions cannot be made by a power of attorney?

A power of attorney cannot do these things:

• Choose a replacement for him or herself or transfer POA power to someone else.

• Make changes to your will.

• Make decisions on your behalf after you die.

• Make decisions outside the scope of the agreement if the POA is limited.

» MORE: When to establish a conservatorship

Who can override a power of attorney?

• The principal can revoke or change a power of attorney designation whenever they wish if they’re of sound mind.

• The principal’s incapacity ends a nondurable power of attorney but not a durable power of attorney.

• The principal’s death ends all power of attorney designations. An estate executor takes over responsibilities related to their will and property distribution.

• A court decree can invalidate a power of attorney designation if the court finds that the agent is not fit to serve. Someone in the principal’s life who is concerned about neglect or exploitation, for example, may challenge a power of attorney designation in court.

• Change in circumstances, such as divorce, in some states, can remove a former spouse’s automatic power of attorney.

» MORE: Who can override a power of attorney?

Dual power of attorney

Dual power of attorney, also called joint power of attorney, gives power to two people and requires that both agents sign off on any decisions. Appointing dual agents can balance the burden on each person, though both are held legally accountable if necessary.

A dual power of attorney might be useful if you have two children, for example, who would like to make joint decisions in your stead. However, this type of arrangement can be risky, especially if the two agents disagree on important issues. If disagreements arise, a judge might have to make the final decision, which could delay essential medical treatments.

Durable power of attorney

A durable power of attorney stays intact if you’re mentally incapacitated (you’re under anesthesia or fall into a coma, for example), while an ordinary power of attorney designation ends if you become incapacitated.

Making a power of attorney durable can prevent you from being placed under a conservatorship or guardianship if you become incapacitated. With some exceptions, your power of attorney should usually be designated as durable so it remains in effect during an emergency^[0]

Limited or special power of attorney

A limited power of attorney — as opposed to a general power of attorney — allows your agent to perform only activities you outline. For example, you could authorize someone to execute documents in your name to sell your home or manage your taxes for a specific time period.

You can set up a limited power of attorney to take effect after a specified event occurs, called a springing power of attorney. If the specified event is medical, however, your agent may have to wait until your doctors decide you’re unable to handle your own affairs before they can act, which may not take effect as soon as you would want.

» MORE: Estate planning: A 7-step checklist of the basics

Medical or health care power of attorney

A medical power of attorney, also called a health care proxy, is a type of advance directive that gives someone the authority to make health care decisions for you according to your wishes, including religious and moral beliefs, when you cannot do so.

Health care proxy decisions generally cover any medical treatment or procedure to diagnose and treat your condition. Make sure the person to whom you grant medical power of attorney understands the decisions you want to be made in connection with different types of treatment^[0]

» Learn more about health care proxies and how to choose one

Financial power of attorney

A financial power of attorney gives someone the authority to handle your financial affairs. These can include everyday tasks, such as banking transactions, and more complex moves, such as transferring property into a trust.

The financial matters you can authorize them to handle may include things such as:

• Distribution of assets to cover daily expenses.

• Real and personal property transactions.

• Stock, bond or other securities trades.

• Banking duties.

• Business operations.

• Insurance and annuity transactions.

• Estate, trust and other beneficiary needs.

• Legal claims and other litigation.

• Retirement benefits payments.

• Tax filing.

• Charitable contributions.

• Handling of government benefits, including Social Security, Medicare or unemployment compensation.

See the requirements for creating a valid power of attorney in these states: