Power of Attorney (POA) is a document that authorizes someone to act on your behalf. Appointing a POA legally empowers the person to make critical decisions for you and your estate. You’ll want to include one in your Life File and end of life planning process.
What are the types of POA?
There are four common types of POA:
- General POA: The appointed person has power over your affairs and can act for you in all situations — legal, financial, health, business.
- Financial POA: The appointed person can act on your behalf for certain financial situations (which you can spell out). This may include allowing the person to pay bills, control real estate, or file taxes on your behalf.
- Medical POA: The appointed person can act on your behalf for health care decision-making (which you can spell out). This may include decisions about medical treatment, surgery, where you receive care, or end-of-life care.
- Digital POA: The appointed person can access and manage your digital assets.
And these POAs can be durable — meaning the appointed person can act on your behalf if you become incapacitated; or non-durable — meaning the appointed person’s power ends if you become incapacitated (not usually used in estate planning).
Can more than one person be a POA?
Yes, but you may want to include a way of resolving disputes if you do. You can also name an alternate POA to cover a situation where your designated person is not available or does not want to act on your behalf.
What happens if I don’t appoint a POA?
States have varying laws on what happens if a person becomes incapacitated without a POA. Generally speaking, the court will appoint someone to act as POA on your behalf.
Who needs a POA?
Everyone. You should include a designated POA in your will and estate plan. Life is unpredictable, and appointing a POA while you are healthy and able to think critically ensures decisions will be made by the person you think is best equipped to follow your wishes. It also prevents unnecessary strain and anxiety from being put on your family in the event you become incapacitated.
You may want to consider who you trust to make decisions that reflect your wishes without letting their own emotions or feelings cloud their judgment. People sometimes appoint non-family members like attorneys for this reason.
How do I establish a POA?
There are five easy steps for establishing a POA:
- Step 1: Decide what types of POA you need: Determine which types of POA best fit your situation or projected needs.
- Step 2: Choose your POA: Pick the person or persons who will be your POA, and how much decision-making authority they will have.
- Step 3: Write your POA: If you don’t wish to consult with an attorney, free drafting services like Power of Attorney and Rocket Lawyer are a great place to start.
- Step 4: Store your POA: Keep a copy somewhere safe — like with your other estate-planning documents in your secure Life File.
- Step 5: Revisit your POA: Remember to revisit your POA regularly (or when circumstances change) to keep it up to date.