zpostcode
Powers of attorney: What they are and how they work
Apr 5, 2025 8:02 AM

  

Powers of attorney: What they are and how they work1

  A power of attorney (POA) doesn’t refer to a lawyer. Rather, a POA is a legal document that you (the principal) can use to delegate your wishes to a trusted agent who can act on your behalf in legal, financial, or health care matters.

  This delegation of power is typically used when you’re incapacitated, perhaps because of an illness or injury, or because you’re away and need someone you trust to make decisions in your stead.

  The term “power of attorney” refers to both the legal document that designates the agent and their duties, as well as the agent who will act as your POA. For example, you might hear, “My sister is my power of attorney in this matter.”

  When do you need a power of attorney?A power of attorney comes into play when you’re absent or incapacitated. Although selecting the people who can fill these roles is often associated with estate or end-of-life planning, you can also set up certain powers of attorney to fill roles in different aspects of your life, as needed.

  For example, you could set up a specific nondurable power of attorney to manage a business deal when you know you’ll be absent. Or you might grant power of attorney to a professional who can oversee your retirement plan. In the case of an emergency that leaves you unable to make decisions, a durable POA designates a proxy who will ensure that your financial or medical concerns are met when you can’t advocate for yourself. Why is a power of attorney important?Powers of attorney can give you greater flexibility in managing aspects of your life. Suppose you’re overseas for work or a military deployment; a short-term POA empowers someone you trust to pay your bills or manage your business.

  More importantly, a POA ensures your specific wishes are carried out in certain circumstances. Without the protection of a POA in place, key decisions about your life or your health could fall to someone who’s familiar with a given situation (such as a doctor or court-appointed guardian). But there’s no guarantee they’ll know your true wishes, values, or priorities.

  4 main types of POA and how they workPowers of attorney come in different forms. They can be temporary or permanent, specific or broad. Some POAs become active, or “spring,” only under certain circumstances. Others can be implemented immediately. All powers of attorney expire when you die.

  Once you select the individual and the role you’d like them to fulfill as your proxy, you can have the document drawn up by a lawyer, signed, witnessed, and notarized. Typically, a legal POA is recognized in all 50 states, but states follow different rules when setting up a POA.

  Your lawyer will know the POA rules for the state where you live. One of the potential dangers of using DIY power-of-attorney documents found online is that boilerplate forms may not adhere to the specifics required by the state where you live.

  

Powers of attorney: What they are and how they work2

  1. Durable power of attorney (DPOA)A durable financial power of attorney is common in estate planning. As the name suggests, a DPOA remains in place even when you’re unable to make decisions or advocate for yourself:

  You can set up a durable financial power of attorney to manage some or all aspects of your finances if you become incapacitated. You can set up a durable health care power of attorney (also called a medical power of attorney) who can make decisions about your medical care if you can’t. From consenting to treatment options to deciding on end-of-life care, a health care POA ensures your medical wishes are upheld.2. Springing power of attorneyA springing POA remains dormant until a specified condition occurs (typically once you’re incapacitated, as declared by a doctor). Only then is a springing POA activated, granting the agent the authority to act on your behalf. This type of POA ensures the agent’s powers are invoked only when necessary, preserving your autonomy.

  That said, a springing power of attorney may not be ideal for estate-planning purposes because it takes time to determine when this type of POA will become active.

  3. General power of attorney (GPOA)This broad POA grants the agent the power to act on your behalf in a wide range of legal and financial matters, including managing bank or investment accounts; signing contracts; overseeing property; and consulting with medical professionals.

  A GPOA is typically nondurable, i.e., it expires once you’re incapacitated. You could have a durable GPOA, which allows a single individual to carry out all your wishes if you’re unable to make decisions, but it might be challenging for one person to administer.

  4. Limited or special power of attorneyAs it sounds, a special power of attorney is narrower in focus than the general POA. You may set up a limited POA to handle specific financial or legal transactions, such as selling a property, paying bills, reviewing a contract, and so on.

  Disadvantages of using a power of attorneyAs with any legal or financial document, using a POA has advantages and disadvantages. Although there can be significant advantages, it’s important to acknowledge that setting up a power of attorney can also make you vulnerable.

  Ideally, when setting up a POA, you’ve selected a person you can trust. But in some cases, the agent you named to manage your finances could commit fraud or theft using the power and access granted to them by the POA.

  Once you’re incapacitated, the person acting as your proxy in your medical or financial affairs is in charge. There’s no one overseeing them. That reality is something to bear in mind as you set up these critical documents and the responsibilities they entail.

  The bottom lineSetting up a power of attorney for financial or health care matters can provide convenience and peace of mind. Ideally, the person you choose will act as your representative, following your wishes and instructions. And the people named for each POA can carry out those duties on your behalf—especially if you’re no longer able to express your wishes or make decisions.

  There is, however, a risk that someone could abuse the decision-making power granted by a POA. That threat is why taking your time and thinking through these roles is important. It might be a good idea to ask the advice of a trusted third party to help you sort through your choices.

Comments
Welcome to zpostcode comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Recommend >
How Hot Is the Sun?
     Sun without sunspots In January 2018 the Sun had no sunspots for almost two weeks. This spotless period was a prelude to an approaching period of solar minimum in 2019, when the sun's activity was at the low end of its 11-year cycle. (more) How Hot Is the Sun? Ask the Chatbot a Question More Actions Share Share Share...
Eve Babitz
     Eve Babitz American writer and artist Eve Babitz holding a copy of her autobiographical 1982 novel, L.A. Woman, in Hollywood, 1997. (more) Eve Babitz American writer and artist Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/biography/Eve-Babitz Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this...
How Do Fireflies Light Up?
     Bioluminescence in a firefly A firefly sends out bioluminescent signal. (more) How Do Fireflies Light Up? Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/science/How-Do-Fireflies-Light-Up Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login). Feedback Type Select a type (Required) Factual Correction Spelling/Grammar...
How Is Sugar Made?
     Sugar crops Structures of the sugarcane (left) and sugar beet (right). (more) How Is Sugar Made? Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/technology/How-is-Sugar-Made Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login). Feedback Type Select a type (Required) Factual Correction Spelling/Grammar...
Information Recommendation
How Was Mount Rushmore Built?
     Mount Rushmore National Memorial Sculpture of Abraham Lincoln under construction in the 1930s, Mount Rushmore National Memorial, southwestern South Dakota, U.S. (more) How Was Mount Rushmore Built? Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/art/How-Was-Mount-Rushmore-Built Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article...
Veronika Decides to Die
     Paulo Coelho Paulo Coelho, author of Veronika Decides to Die (1998), in 2008. (more) Veronika Decides to Die novel by Coelho Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/topic/Veronika-Decides-to-Die Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login). Feedback Type Select a...
What’s the Difference Between a Symphony and an Orchestra?
     Orchestra An orchestra performing at the Hatch Memorial Shell in Boston. (more) What’s the Difference Between a Symphony and an Orchestra? Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/art/Whats-the-Difference-Between-a-Symphony-and-an-Orchestra Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login). Feedback Type Select a...
William Moulton Marston
     William Moulton Marston, a pioneer in developing the lie detector American psychologist William Moulton Marston (seated, right) using the systolic blood pressure deception test, an early version of the lie detector, to check the pulse and blood pressure of James Alphonso Frye (center, wearing a white shirt) in 1926. The photo is a reenactment of Marston's use of the...
What Are Torpedo Bats?
     Torpedo bat vs. traditional bat The newly designed torpedo bat (left) next to a conventionally shaped bat in the dugout during a Toronto Blue Jays–Washington Nationals game in Toronto, March 31, 2025. (more) What Are Torpedo Bats? Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/sports/What-Are-Torpedo-Bats Feedback Corrections? Updates? Omissions? Let...
Under the Net
     Iris Murdoch Iris Murdoch, author of Under the Net (1954), in 1987. (more) Under the Net novel by Murdoch Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/topic/Under-the-Net Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login). Feedback Type Select a type (Required)...
Marcus Samuelsson
     Marcus Samuelsson Chef and restaurateur Marcus Samuelsson, 2022. (more) Marcus Samuelsson Ethiopian-born chef Ask the Chatbot a Question More Actions Share Share Share to social media Facebook X URL https://www.britannica.com/biography/Marcus-Samuelsson Feedback Corrections? Updates? Omissions? Let us know if you have suggestions to improve this article (requires login). Feedback Type Select a type (Required) Factual Correction Spelling/Grammar Correction Link Correction...
How Is Silk Made?
  How Is Silk Made? Actions Share Share Share to social media Facebook X URL https://www.britannica.com/technology/How-Is-Silk-Made Ask the Chatbot a Question Written and fact-checked by The Editors of Encyclopaedia Britannica Encyclopaedia Britannica's editors oversee subject areas in which they have extensive knowledge, whether from years of experience gained by working on that content or via study for an advanced degree. They...