A power of attorney is a document that lets someone you trust, called your agent, act for you. It can be one of the most useful planning documents because it works while you are still alive.
Common types
- General: broad power over finances, which ends if you become incapacitated unless it is also durable.
- Durable: stays in effect if you lose the ability to make decisions.
- Limited or special: covers one task, such as selling a car or closing on a house.
- Springing: takes effect only when a specific event happens, often incapacity.
- Healthcare: lets your agent make medical decisions if you cannot, often paired with a living will.
Choosing an agent
Choose someone trustworthy, organized and willing to serve. Agents have a duty to act in your interest, but a power of attorney gives them real access to your money, so consider naming a backup and, if you wish, requiring regular accountings.
Making it valid
Requirements differ by state, but usually involve your signature and either a notary, witnesses or both. Banks may have their own preferences, so ask about their rules in advance. You can generally revoke a power of attorney in writing as long as you have the mental capacity to do so.
If you wait too long
If someone loses capacity without a power of attorney, their family may have to ask a court to appoint a guardian or conservator, which is slower, public and more expensive.
Frequently asked questions
Does a power of attorney continue after death?
No. It ends at death, and your will or trust then governs your property.
Is a power of attorney the same as a will?
No. A power of attorney works during your life, while a will takes effect after your death.