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A power of attorney review is a careful assessment of a legal POA document used to designate someone to handle your property, health, or financial matters. A power of attorney is a crucial component of any estate plan, and anyone over 18 can make a POA.

What Is a Power of Attorney (POA) and How Does It Work?

A power of attorney is a standardized document that binds the principal and the agent, also known as the attorney-in-fact. It is used when a principal is temporarily or permanently unwell, disabled, or incapable to sign legal documents. The principal must appoint a delegated POA to handle their business on their behalf. You can get the documents online or through a lawyer. The contract- must be signed by both the parties. In most circumstances, it requires to be seen by a third party.

Most POA documents allow the agent to act on behalf of the primary in all real estate and financial concerns, provided that the principal is in sound mental health. A power of attorney may also be restricted to medical issues, allowing the agent to act on behalf of a person incapable of making decisions.

A power of attorney may expire for several reasons, including when the principal terminates or passes away, when it is declared invalid by a court, or when the representative can no longer fulfill the specified duties.

Furthermore, powers of attorney come in a variety of forms. A general power of attorney only functions while the principal has the capacity to make decisions for themselves, whereas a durable POA remains in effect even when the principal loses capacity. A springing power of attorney is a special form of a durable power of attorney which only comes into force once a doctor has determined that the principal has lost capacity.

Understanding the Types of Power of Attorney

There are several reasons why someone may give another person the authority to act in their place. Depending on the state where the principal resides, there may be a need for several different powers of attorney. Below are some prominent types of powers of attorney:

  • Medical POA

    The authority to make medical choices for the principal is granted by medical POA to the attorney-in-fact. A clinical power of attorney comes into effect when the primary cannot make decisions regarding their medical care. In some states, a medical power of attorney (POA) must be used instead of an enduring power of attorney.

  • Financial POA

    The primary delegate their power to act as their attorney-in-fact to make financial decisions on their behalf in this instrument. The authority may only be used for operations, such as real estate deals, to represent the principal during an IRS audit, or to handle all of the person's financial choices.

    A financial power of attorney may fall under the category of a durable power of attorney, which means it will remain in effect even if the principal becomes unable. Should the principal not experience any disability, a power of attorney lasts until the principal's death, much like a non-durable power of attorney.

  • Springing POA

    These rights might provide the attorney-in-fact limited or vast authority and are brought about by a particular instance. When the principal cannot act on their behalf due to any circumstance, including illness, disability, or incapacity, a power of attorney usually takes effect. As a result, the principal has more control over when the attorney-in-fact gains the authority to act. A springing power of attorney is frequently employed as a tool for estate preparation, but it can be useful for anyone who wants to be prepared in case of a serious injury or illness.

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How to Choose an Attorney-in-Fact

The attorney-in-fact should be someone the principal trusts because they will entrust them to make critical choices on their behalf. Before establishing the- power of attorney, it is advised that the principal consultant with the subject. In the case of a living will or medical power of attorney, the principal should make sure the principal is fully aware of the care the principal desires, the end-of-life decisions with which the principal is most satisfied, and any other pertinent information.

The medical power of attorney should be precise about the principal's preferences, including choices like organ donation, after these limitations have been acknowledged. The teacher should convey their goals to the students' families as well. Make sure the person the principal has designated for financial management is aware of their bank accounts if they appoint someone to manage their finances if they become incapacitated.

It includes giving information on any savings accounts, investment accounts, and other financial accounts they would need access to give care to their designated attorney-in-fact. Besides, it is advisable to get in touch with the financial institutions and give them a copy of a power of attorney for their records.

What Are the Limits to POA?

Numerous choices made by a power of attorney may affect the principal. For instance, if a financial power of attorney is granted, the attorney-in-fact will have the authority to handle financial matters such as bill payment, opening and shutting of bank accounts, purchasing and selling of housing markets, and opening and closing of investment accounts.

Should the principal decide they do not want their attorney-in-fact to carry out specific acts, such as shutting a bank account, selling property, or opening investment accounts, this authority is constrained by the language in the legal document. However, most financial actions are permitted by law unless the wording restricts this ability. Medical powers of attorney or healthcare mandates grant the attorney-in-fact considerable discretion to act on the principal's behalf.

This person may have the authority to consent to or decline a surgical operation, decide whether to issue do not resuscitate (DNR) orders, or guide funeral and burial arrangements if the principal passes away. Similar to a financial power of attorney, this power may have restrictions imposed by the original legal document's text. Anyone with a formal healthcare power of attorney should ensure that their family, medical staff, and the individual to whom the authority is granted are all aware of their preferences regarding their medical care.

In addition, it is crucial to remember that each state may have particular laws governing how to cancel a power of attorney. However, in most jurisdictions, if the principal is of sound mind and signs a document revoking the power of attorney in front of a notary, authority can be revoked. Therefore, it is important to ensure the original attorney-in-fact is informed of any modifications, regardless of the situation.

Key Terms

  • Certificate of Incapability: A certificate administered by a regional health officer after a medical and practical assessment finds an adult mentally incompetent.
  • Notarized: When a notary publishes their stamp on a record to ensure that a person signed the document in front of the notary.


A power of attorney is an estate planning tool that can help you prepare for anything. For instance, if you are hurt in an accident and cannot converse, your loved ones won't get access to the money they may need to pay for your treatment without a power of attorney. If you wish to create a power of attorney document, it is better to consult our expert attorneys at ContractsCounsel.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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