A power of attorney lets someone else handle your money, property, or medical decisions on your behalf
A power of attorney is a legal document that gives another person — called an agent or attorney-in-fact — the right to act for you. That person can sign documents, move money, sell property, or make medical choices depending on what the document says you want them to do. You stay in control: you decide exactly what powers the agent has, when those powers start, and when they end.
The person who signs the power of attorney document is called the principal. You are the principal. The person you name is the agent. The agent has no power unless you give it to them in writing, and they can only use the powers you list. If you change your mind, you can revoke the document at any time while you are mentally able to do so.
Key Takeaways
- A power of attorney is a written document you sign that lets someone else handle specific tasks — money, property, or medical decisions — on your behalf.
- You choose exactly what powers your agent has; they cannot do anything the document does not permit.
- A durable power of attorney stays in effect even if you become unable to make decisions yourself, which is why most people use this type.
- You can revoke a power of attorney at any time as long as you are mentally able to understand what you are doing.
- Different states have different rules about how to sign and record a power of attorney, so the document must follow your state's law.
Financial power of attorney handles money and property
A financial power of attorney lets your agent pay bills, deposit checks, sell a house, manage investments, or handle tax returns. You decide the scope. You might give your agent power to do everything with your money, or only to manage a specific bank account or piece of property.
This is useful if you are traveling for months, managing a business, or getting older and want someone to help with paperwork. It is also useful if you become ill or injured and cannot handle finances yourself. The agent acts in your name — they sign documents as your representative, not as themselves.
A financial power of attorney can be when ready, meaning it takes effect as soon as you sign it, or springing, meaning it only takes effect when a specific event happens — usually when a doctor says you are no longer able to make decisions. Springing powers are less common because they can create confusion about when the agent's authority actually begins.
Healthcare power of attorney lets someone make medical decisions
A healthcare power of attorney — also called a healthcare proxy or medical power of attorney — lets your agent make medical decisions if you cannot. That includes choosing doctors, approving surgery, deciding on end-of-life care, and accessing your medical records.
This is separate from a living will, which is a document that tells doctors what kind of care you do or do not want if you are dying. A healthcare power of attorney is a person who can make those decisions in real time as situations come up. Many people sign both documents so their agent knows what they would want.
Your agent must follow your wishes and values. If you have told them you do not want life support, they cannot authorize it. The agent's job is to speak for you, not to make choices based on what they think is best.
Durable versus non-durable: what happens if you become unable to decide
A durable power of attorney stays in effect even if you become mentally unable to make decisions. This is the type most people use because it protects you if you have a stroke, develop dementia, or fall into a coma. Without a durable power of attorney, your family would have to go to court and ask a judge to appoint a guardian — a slow and expensive process.
A non-durable power of attorney ends automatically if you become unable to make decisions. This type is rarely used because it stops working exactly when you need it most. It is useful only in narrow situations — for example, if you are having surgery and want someone to handle one specific task while you recover, but you will be able to make decisions again soon.
The difference is stated in the document itself. Your state's law determines what language makes a power of attorney durable. Most states require the document to say something like "this power of attorney shall not be affected by the principal's subsequent disability or incapacity."
Limited power of attorney restricts what your agent can do
A limited power of attorney gives your agent power to do only specific things. For example, you might give someone power to sell one piece of property, or to sign documents for a real estate closing, or to handle one bank account. Once that task is done, the power ends.
Limited powers are useful when you need help with one specific situation but do not want to give someone broad control over your finances or medical decisions. You might use a limited power of attorney if you are out of the country and need someone to sign a contract, or if you want one person to manage one investment account while another person manages a different account.
What your agent can and cannot do
Your agent can only do what the power of attorney document says. If the document gives them power to manage your bank accounts, they can deposit checks and pay bills. They cannot sell your house unless the document specifically gives them that power. They cannot change your will, make gifts to themselves (in most states), or do anything outside the scope you set.
Your agent has a legal duty called a fiduciary duty. That means they must act in your best interest, keep your money separate from theirs, keep records of what they spend, and be honest about how they use the power you gave them. If they steal from you or misuse the power, you can sue them, and they can face criminal charges.
Your agent cannot act after you die. Once you die, your will and your estate plan take over. Your agent's power ends when ready. If you want someone to handle your affairs after death, that person is called an executor, and they are named in your will, not in a power of attorney.
How to create a power of attorney in your state
Every state has its own rules about how to sign and record a power of attorney. Most states require you to sign the document in front of a notary public. Some states require witnesses as well. Some states have specific forms you must use; others let you write your own as long as it meets the state's legal requirements.
Your state's bar association website usually has a form or a list of what the document must include. You can also work with an attorney, though for a straightforward power of attorney many people use online legal document services that generate a form for your state. The cost of an attorney ranges widely depending on complexity; a straightforward power of attorney might cost $200 to $500, while a complex estate plan costs more.
Once you sign the document, keep the original in a safe place — a safe deposit box, a home safe, or with your attorney. Give copies to your agent and to anyone who might need to see it, such as your bank or your doctor. Tell your agent where the original is kept so they can find it if they need to use it.
What happens if you do not have a power of attorney
If you become unable to make decisions and you do not have a power of attorney, your family has to go to court and ask a judge to appoint a guardian or conservator. This process takes weeks or months, costs money in court fees and attorney fees, and is public — anyone can see the court documents. A judge decides who gets the power, not you.
If you die without a power of attorney and without a will, your state's laws decide who inherits your property and who manages your estate. Your family might fight over what you would have wanted. A power of attorney lets you choose who handles your affairs and what they can do.
Frequently Asked Questions
Can my agent use the power of attorney after I die?
No. A power of attorney ends when you die. Your agent's authority stops when ready. If you want someone to manage your property after death, name them as executor in your will. An executor has different powers and responsibilities than an agent under a power of attorney.
Can I have more than one agent?
Yes. You can name two or more agents. They can act together (both must sign), or separately (either one can act alone). You decide in the document. Acting together is safer because it requires agreement, but it is slower. Acting separately is faster but riskier if the agents disagree.
What if my agent does not want the job anymore?
Your agent can resign by giving you written notice. If you become unable to make decisions, they can resign by notifying the person you named as successor agent, or by notifying your family. You should name a backup agent in the document in case your first choice resigns or dies.
Does my agent have to tell me what they do with my money?
Yes. Your agent must keep records and account for how they spend your money. If you are able to make decisions, you can ask them for a full accounting at any time. If you become unable to decide, your family or a court can demand an accounting to make sure the agent is not stealing from you.
Can I change my power of attorney after I sign it?
Yes, as long as you are mentally able to understand what you are doing. You can change the powers, name a different agent, or revoke it entirely. You must do this in writing. Tell your bank, your doctor, and anyone else who has a copy that the old document is no longer valid.