A power of attorney lets you name someone to make decisions on your behalf if you are ever unable to do so yourself. It is one of the most important legal steps a senior can take — and one that must be set up before it is needed, not after.
What Does Power of Attorney Mean?
A Power of Attorney is a legal document in which you (the principal) authorize someone else (the agent or attorney-in-fact) to act on your behalf. Depending on how it is written, that authority can cover financial decisions, legal matters, healthcare, or all of the above. The agent acts in your name and is legally obligated to act in your best interest.
A power of attorney (POA) is a legal document that gives another person — called your agent or attorney-in-fact — the authority to act in your name. Depending on how the document is written, your agent may be able to manage your bank accounts, sign legal documents, pay your bills, or make healthcare decisions for you.
The person granting the authority is called the principal. You remain in control as long as you are able. A well-drafted POA simply ensures that someone you trust can step in if your health or circumstances change.
The Two Main Types
1. Financial Power of Attorney
This covers money and legal matters: paying bills, managing investments, filing taxes, handling real estate transactions, and conducting banking on your behalf.
Most seniors choose a durable financial POA, meaning it stays in effect even if you become incapacitated. Without the word "durable," a standard POA automatically ends if you lose the ability to make decisions — which is precisely when you need it most.
2. Healthcare Power of Attorney
This is sometimes called a healthcare proxy or medical POA. It gives your agent the authority to make medical decisions on your behalf if you cannot communicate your own wishes.
Your healthcare agent should be someone who:
- Knows your values and wishes well
- Can stay calm under pressure
- Is willing to advocate clearly with medical staff
- Can be reached quickly in an emergency
Your financial and healthcare agents do not need to be the same person, and often it makes sense to separate the roles.
Why Do You Have to Set This Up Before You Need It?
A Power of Attorney can only be signed by someone with legal capacity — meaning the mental ability to understand what they are signing. If you wait until after a health crisis, stroke, or cognitive decline takes hold, it may be too late. At that point the only option is guardianship through the courts, which is far more expensive and time-consuming.
This is the part many families learn too late. Once a person loses the legal capacity to make decisions, it is no longer possible to sign a POA. At that point, the only option may be a court-supervised guardianship or conservatorship — a process that is slow, expensive, emotionally difficult, and removes control from the family.
A properly signed POA, by contrast, takes effect immediately when needed and keeps decision-making within your family.
Choosing Your Agent
Take your time with this choice. Your agent will have significant authority, so trust is the most important factor — more than proximity or availability, though those matter too. Consider:
- Does this person understand your wishes and values?
- Are they organized enough to manage paperwork and deadlines?
- Will they act in your interest even under family pressure?
- Do they have the time to take this on?
You can also name a successor agent — a backup person who steps in if your first choice is unable or unwilling to serve.
How Do You Get a Power of Attorney Done?
An estate planning or elder law attorney can draft one tailored to your state's requirements and your specific situation. Many states also have statutory forms available online, but the rules for witnessing and notarization vary. Having an attorney review or prepare the document ensures it will be accepted by banks, healthcare providers, and government agencies when you need it.
A POA must be signed and notarized to be legally valid, and some states require witnesses as well. The requirements vary by state.
- Speak with an elder law attorney, who can draft both a financial and healthcare POA tailored to your situation and valid in your state.
- Review the document carefully — make sure the scope of authority is exactly what you intend.
- Sign with the required witnesses and a notary present.
- Give a copy to your agent, your doctor (for the healthcare POA), and your bank.
- Store the original with your other important documents and tell your agent where to find it.
Where to Learn More
- National Academy of Elder Law Attorneys — naela.org A directory for finding an elder law attorney in your state who can prepare a legally valid POA for your situation.
- AARP Power of Attorney Guide — aarp.org/caregiving/financial-legal/info-2017/power-of-attorney-guide A plain-language overview of how POA works, what to look for, and how to choose an agent.
- USA.gov — Power of Attorney — usa.gov/power-of-attorney A brief federal overview with links to state-specific resources.