Power of Attorney
A legal document authorizing one person (the agent) to act on behalf of another (the principal) in legal, financial, or medical matters.
A power of attorney (POA) is a written authorization granting another person — the agent or attorney-in-fact — the legal authority to act on the principal's behalf. The scope and duration vary: a general POA grants broad financial and legal authority; a limited POA covers specific transactions (e.g., closing a real estate deal while you're traveling); a healthcare POA (healthcare proxy) designates someone to make medical decisions if you are incapacitated.
A durable POA remains valid if the principal becomes mentally incapacitated — critical for estate planning. A non-durable POA terminates upon incapacity, limiting its usefulness for planning scenarios. A springing POA only activates upon a defined triggering event (like a physician's certification of incapacity).
POAs are powerful documents. The agent owes a fiduciary duty to the principal but POA abuse — an agent depleting bank accounts, transferring property to themselves, or making gifts for their own benefit — is one of the most common forms of elder financial abuse. Execute POAs with counsel, keep copies in secure locations, and review them periodically.
Real-World Example
When the 78-year-old suffered a stroke, her daughter's durable power of attorney allowed her to manage her mother's bank accounts, pay bills, and sell the family home — avoiding the need for a costly guardianship proceeding.