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People often put off designating a power of attorney because it’s unpleasant to think about being in the position of needing someone else to handle your affairs. However, having that legal box checked off is important if you want your affairs—financial and otherwise—to be handled should you be unable to due to an illness or injury.

A power of attorney (POA) is a legal document giving a trusted individual or organization the authority to make decisions and act on your behalf. If you were to become incapacitated without a POA in place, your friend or family member would need to petition to be your guardian, or conservator, through a lengthy and potentially expensive court process, leaving your bills unpaid and other affairs unhandled in the interim.

While you may be in good health today, life doesn’t always go as planned, so it’s a good idea to put a POA in place as a general precaution. Without one, your loved ones can face unnecessary stress and hardship. And, as a person grows older or begins showing signs of any sort of impairment, having a POA becomes essential.

How to Create a Power of Attorney

The best person to help you with implementing a POA is an attorney who specializes in family or estate planning law. If you can’t afford an attorney, you can download a template online and do it yourself or get help from legal aid services through or However, the advice of an experienced attorney can be invaluable in setting up your POA so that it best suits your needs, and you may be surprised at how affordable it is.

POA laws vary by state, but all share some rules in common.

  • It must be in writing with instructions clearly spelled out.
  • You must use a form that satisfies the requirements of your state.
  • All parties must be identified in the POA, including the principal, which is the person granting the POA, and the agent or attorney-in-fact, which is the person or group being granted power of attorney.
  • Specific powers should be clearly stated and delegated, rather than just granting sweeping authority to handle all affairs. There may also be specific state laws or codes that should be referenced in the document to clearly delegate powers.
  • It should specify durability, meaning it needs to say when it terminates if the principal were to become incapacitated.
  • The document should be notarized, even if the state does not require it.
  • In some states, a formal recording is required for the document to be legal. Check with your county to see if this applies to you.
  • In many cases, including issues of child guardianship, it should be filed with the appropriate court.

A power of attorney can be terminated by setting a duration of time for which it is in force, a specific termination date, or if you expressly revoke it. It’s important to note that all powers of attorney cease upon the principal’s death, so once the principal passes away, the agent can no longer conduct business on behalf of that person. Instead, the estate of the deceased person conducts business through the designated personal representative or executor of the estate.

Types of Powers of Attorney

There are several different types of POAs that apply to different circumstances and needs.

General Power of Attorney

A general power of attorney grants broad powers to the agent acting on the principal’s behalf, including any and all matters the state allows. Depending on what’s spelled out in the agreement, this may include filing taxes, managing bank accounts, signing checks, selling property, handling investments, and more. Also, when it comes to bank accounts, the majority of banks have their own POA they require to be signed, even if a legal one has been executed. So when it comes to your bank accounts, be sure to request a POA be drafted.

Limited Power of Attorney (LPOA)

Limited power of attorney (LPOA), also known as a special power of attorney, grants the agent power to act in specific matters or upon specific events. This might include giving limited POA to a trusted financial advisor to manage an investment portfolio for a given amount of time while also granting limited POA to an adult child to handle household bills.

Medical Power of Attorney

A medical power of attorney, also known as a healthcare power of attorney, grants the agent power to make medical decisions on your behalf if you are unconscious, incapacitated, or otherwise unable to do so. A medical power of attorney is different from a living will, which addresses end-of-life care and decisions, but the two documents are related and often prepared together.

Keep in mind, without a medical POA, your state’s laws may give certain loved ones priority in making healthcare decisions over others. For example, if you are unmarried, your estranged parents would have more say than your significant other of 20 years. If you are married, your estranged spouse would have more say than your adult children.

Durable Power of Attorney (DPOA)

A durable power of attorney is a provision of a POA for the purpose of safeguarding against problems that may occur in the case that you become mentally incompetent while a POA is in effect. You can specify which doctor may determine your incompetency or require that more than one doctor deems you incompetent.

DPOA grants the agent power to make decisions and act on the principal’s behalf and continues until the principal’s death, at which point the last will and testament takes effect. If there is a POA in effect with no durability clause, the court will need to appoint a conservatorship or guardianship.

Who Should Be Granted Power of Attorney?

Technically, anybody can be given POA, so long as the principal does so under free will and is mentally competent at the time. If you are considering who to appoint as your agent, it should only be someone you deem capable, reliable, and trustworthy—a spouse, adult child, family member, close friend, or reputable attorney or financial professional.

Don’t feel compelled to name someone who would not be a good representative to handle your financial affairs. Keep in mind, this person will have the legal authority to act as you. Any actions they take or mistakes they make will be difficult to correct.

It’s not always an easy decision, but your agent should be the person most capable of ensuring your wishes are carried out. If you and your spouse are both elderly, it might make more sense to appoint an adult child than one another. If your adult child is irresponsible, defiant, has a demanding job, or has a lot on their plate, you may want to consider assigning someone else the responsibility.

You might also want to consider naming multiple agents, allowing them to act separately or requiring them to act together. For example, you may want your corporate CFO child to serve as POA for managing your investments while your homemaker child manages monthly bill paying. You may also want one to act independently of the other or ensure that they both have to agree on any actions taken.

Trust is key. Anyone granted POA does have a legal fiduciary duty to make decisions in the best interest of the principal, but a lot of damage can be done in the wrong hands. It’s important to be cautious but know that the person can be held accountable for abusing the power. Further, even if you do trust the person, it’s best to include safeguards, such as a requirement for the agent to report activity to an outside party or accountant every so often.

Be sure to review your selection periodically, make adjustments as circumstances change, and revoke and issue a new power of attorney as you see fit.

Persuading Your Parents to Grant POA

Having a power of attorney in place is a protective measure. It’s meant to ensure things are handled according to your wishes and that your affairs are taken care of as needed. Even so, it’s not uncommon for people to be reluctant to give others power.

Parents may feel as if they are handing over control and losing their sense of independence. And they’ve probably heard stories of adult children meddling in their parent’s money, either deliberately abusing their power or inadvertently mishandling it. No matter how trustworthy or well-intentioned you are, it’s natural to feel some hesitation. Make sure your parents understand that without a POA in place, they may face negative consequences. Without a party authorized to take distributions, pay taxes, or manage household bills, they could be hit with late payments, fees, and penalties. Their utilities could be turned off, cars repossessed, and bills sent to collections.

It’s best to have conversations about such issues during happy times, before the need becomes imminent. If they are reluctant, encourage them to speak with a trusted professional who can guide them in starting small, with limited powers, and put safeguards in place to protect themselves and maintain control as long as possible.

While you’re at it, walk your talk and put a power of attorney in place for yourself, demonstrating that you truly recognize the importance of POAs.

Covering Your Bases

Having a power of attorney is a smart move. Someone will have to handle your medical and financial decisions in the event that you are unable to do so. Proactively putting a POA in place lets you ensure it’s assigned to the person of your choosing and that your wishes are spelled out.


Kevin Stoddard is a LPL Financial Advisor with Stoddard Financial in Medfield, Massachusetts. Stoddard helps clients throughout New England to identify, plan, and execute strategies designed for securing their desired financial future. With their Financial Wellness @ Work program, they engage, educate, and empower employees by helping them to understand and appreciate the value of their benefits package. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

This material was prepared by Crystal Marketing Solutions, LLC, and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate and is intended merely for educational purposes, not as advice.