Power of Attorney (POA): What It Is, Types & Guide

A power of attorney is a legal document that gives a person the authority to act on another's behalf.
Taryn Phaneuf
By Taryn Phaneuf 
Updated
Edited by Claire Tsosie

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Nerdy takeaways
  • Power of attorney (POA) gives someone the legal right to make decisions for someone else.

  • You can name a POA for legal, financial or medical decisions. You can name different people for each role.

  • An ordinary power of attorney ends if you become incapacitated, but a durable power of attorney stays intact.

Nerdy takeaways
  • Power of attorney (POA) gives someone the legal right to make decisions for someone else.

  • You can name a POA for legal, financial or medical decisions. You can name different people for each role.

  • An ordinary power of attorney ends if you become incapacitated, but a durable power of attorney stays intact.

What is power of attorney?

A power of attorney is a legal document giving someone (the "agent" or “attorney in fact”) authorization to make legal, financial or medical decisions for someone else (the “principal”). A power of attorney lets someone act on your behalf if you’re ill or aren’t able to sign something

American Bar Assocation. Power of Attorney. Accessed Jul 28, 2023.
.

  • An agent with power of attorney is a fiduciary, meaning they’re legally bound to make decisions in your best interest

    Cornell Law School. Power of attorney. Accessed Jul 28, 2023.

  • 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. 

  • 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.

  • If you don’t choose a POA, one could be chosen for you. If you don't have an agent and become incapable of managing your personal or business affairs, a court could appoint someone (a conservator) to act for you. Court intervention can be public, and there's no guarantee that a conservator would act as you wish.

What decisions cannot be made by a power of attorney?

A power of attorney cannot do these three things:

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

  2. Make changes to your will.

  3. Make decisions on your behalf after you die.

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Who or what can remove a power of attorney?

  • You, the principal, can revoke or change a power of attorney designation whenever you wish if you’re of sound mind.

  • Your incapacity ends a nondurable power of attorney but not a durable power of attorney.

  • Your death ends all power of attorney designations. Responsibilities related to your will and the distribution of your property rest with the executor of your estate.

  • A court decree can invalidate your power of attorney designation if the court finds that your agent is not fit to serve. Someone in your 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.

Types of 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. It might be used, for example, if you have two children and want to give them equal roles in your care.

But 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

An ordinary power of attorney designation ends if you become incapacitated, while a durable power of attorney stays intact if you’re mentally incapacitated (you’re under anesthesia or fall into a coma, for example). However, it does not remain in place if you die

American Bar Assocation. Pick the Right Power of Attorney Instrument. Accessed Jul 28, 2023.
.

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 could delay important medical treatments.

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.

Your health care proxy can generally make decisions on any medical treatment or procedure to diagnose and treat your condition. Most states recognize your spouse as having medical power of attorney if you become incapacitated and don’t have a medical power of attorney in place.

Financial power of attorney

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.

  • Charitable contributions.

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

How does power of attorney work in my state?

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

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