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Power of Attorney, n
What Is a Power of Attorney?
A power of attorney (POA) is a legal document that allows you to designate someone to act in a legal capacity on your behalf (acting as your "agent" or "attorney-in-fact"). Most powers of attorney can be revoked and end when the grantor dies.
You can create a power of attorney to appoint someone to:
- Access and manage your bank accounts and other financial accounts
- Help run your business
- Buy or sell real estate/property for you
- Make gifts or create trusts on your behalf
- Make decisions about your medical care
Powers of attorney are often part of estate planning and long-term care planning. They allow you to designate someone to handle your finances and affairs should you become incapacitated. If you become incapacitated without a power of attorney, a court might choose this person for you.
Types of Power of Attorney
How a power of attorney works depends on the type you create. Here are the definitions of the various powers of attorney:
Durable power of attorney: A power of attorney that does not end when the grantor becomes incapacitated or is deemed legally incompetent. A durable power of attorney for healthcare allows you to choose an agent to make your healthcare/medical decisions if you are unable to do so yourself.
Financial power of attorney: A power of attorney used only for financial affairs.
General power of attorney: A general power of attorney typically allows your agent to take any legal action on your behalf. This power of attorney ends when you become incapacitated.
Irrevocable power of attorney: Most powers of attorney are revocable, but some have a clause that states the grantor has given up the right to revoke. Irrevocable powers of attorney are commonly used for short-term actions such as proxy voting and personal service in guardianship cases involving out-of-state guardians.
Power of attorney for healthcare: This is also called a durable power of attorney for healthcare, healthcare directive, or medical power of attorney. It is often combined with a living will. Through a power of attorney for healthcare, you designate someone to act as your agent when you are unable, because of incapacity, to make your own healthcare decisions.
Special power of attorney: Unlike a general power of attorney, a special power of attorney limits the agent's powers, usually to one specific task (such as selling property). This might also be called a specific power of attorney, or a limited power of attorney.
Springing power of attorney: This is a durable power of attorney that only takes effect at a specific future time, usually when you become incapacitated.
Power of Attorney Rights and Limitations
State laws typically dictate how a power of attorney can be used. It is important to research your state's laws before creating a power of attorney. Note that many states have adopted, or have introduced in their legislatures, the Uniform Power of Attorney Act (UPOAA), which allows uniform rules across the states regarding the rights and limitations of powers of attorney.
Similarly, the agent's role is limited by law. In general, agents cannot do anything that is against your interests. Agents cannot:
- Change your will
- Give the power of attorney to another person
- Retain the power of attorney after your death
- Receive compensation for their decisions unless clearly defined in the POA
- Uniform Power of Attorney Act (UPOAA): An act proposed to create uniformity in power of attorney laws across the states. More than half of the U.S. states have adopted this Act.
- Uniform Probate Code: Some states have adopted this code, created by the Uniform Law Commission, to have uniformity in their probate laws.
- See also: Your state's estates code or probate code.
Power of Attorney Sample/Template
Many state court websites offer templates for you to create a power of attorney. But be careful — there are many reasons why DIY on these important documents could cause problems now or later.
It is a good idea to use a form that has been vetted by lawyers and is specific to your state and unique situation. You can find such a form through our power of attorney form page.