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The Three Main Roles of a Power of Attorney

  • Making medical decisions on behalf of the principal.

  • Handling financial and legal matters on behalf of the principal.

  • Making decisions on the behalf of someone who has lost their mental capacity.

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A power of attorney is a legal document giving another person the legal right to do certain things for you. What those powers are depends on the terms of the document. A power of attorney may be very broad or very limited and specific. All powers of attorney terminate upon the death of the maker and may terminate when the maker (principal) becomes incapacitated (unable to make or communicate decisions). When the intent is to designate a back-up decision-maker in the event of incapacity, then a durable power of attorney should be used. Durable Powers of Attorney should be frequently updated because banks and other financial institutions may hesitate to honor a power of attorney that is more than a year old.

With a power of attorney in place, you can be confident that you’re prepared and your parent’s wishes will be respected when they need help.  In this guide, we’ll explain the types of power of attorney, when a POA for an elderly parent makes sense, and go through the steps of choosing and setting up a power of attorney so that you feel prepared to complete this process for your loved one.

At its most basic, a power of attorney is a document that allows someone to act on another person’s behalf. The person allowing someone to manage their affairs is known as the principal, while the person acting on their behalf is the agent.  You also need to understand what a POA cannot do. A POA only allows someone to do the things that are agreed upon within the document. If your parent signs a POA allowing someone to act on their behalf, they can still act on their own behalf so long as they retain the capacity to do so. An agent doesn’t have the exclusive right to act and make decisions for the principal.  Additionally, agents must act as fiduciaries. This means that if you’re the power of attorney for your parent, you must manage their affairs to their benefit, not your own.


Different types of POAs can also give the agent different powers, so it’s important to research the type of POA you need.


General Power of Attorney


This type of POA gives the agent broad rights to manage the affairs of the principal. It lasts for a specified time, which can be noted in the document. It can also be revoked by the principal at any time and will automatically end when the principal is determined to be incapacitated. This type of POA is often used when someone can still take care of their affairs but would rather someone else do so. As these POAs end at incapacitation, they’re not a great choice for end-of-life planning or medical directives.

Durable Power of Attorney


A durable power of attorney lasts after the principal’s incapacitation. What you can do with a durable POA is based on both the document and state laws. In some cases, you may only be able to manage the principal’s finances and will need a separate medical power of attorney to make health care decisions. These POAs are used when a person can no longer handle their affairs, and it can end in several ways. They can be revoked upon the principal’s death or when a guardian is appointed. The principal can revoke the POA if they’re no longer incapacitated. For example, if a person wakes from a coma, they can take back control of their finances. There may also be conditions in the document that, if fulfilled, end the POA. A durable power of attorney comes into effect on the day it’s signed unless otherwise specified.

Springing Power of Attorney


A springing power of attorney is a type of durable POA. In this case, the terms don’t become effective until the principal is incapacitated. In most cases, this is when a doctor determines the principal can no longer manage their finances; however, the POA or state may have a different definition of when a person becomes legally incapacitated. For example, it may require certification from two doctors. This type of POA allows the principal to stay in control while they have the capacity, but it is ready to spring into action once they’re incapacitated. However, it may take time to get a certification of incapacitation, which may mean a delay in handling their affairs while waiting for paperwork. 

Medical Power of Attorney


A medical power of attorney gives an agent the right to make decisions about the principal’s health care. It’s a type of durable POA that lasts until it’s revoked or the principal is determined to be competent again. It may also have an expiration date listed in the document. This type of POA is needed for people who can’t make decisions about their medical care and is common for later-life planning and making legal preparations for people with disabilities. 

A medical POA is different from a living will, which states what medical procedures a principal does and does not want done. In the case of a medical POA, the agent can make all health care decisions for the principal. Because of this, your parent needs to make their wishes known to the agent before they’re incapacitated. 

Limited Power of Attorney


A limited power of attorney limits the agent to make decisions about specific tasks. It is often used to authorize someone to pay bills or sell a house, and the agent can only take action that’s specified in the document. These POAs are generally only active temporarily and will be revoked if the principal becomes incapacitated.

Why Do You Need a Power of Attorney? 


A power of attorney allows someone else to take care of your parent’s affairs. It can be temporary, for example paying bills while someone is on a long vacation, or lasting, such as making medical decisions after a car accident. As parents get older, it makes sense to be prepared for health issues that may mean they need help. A POA allows children, or another agent, to step in when the need arises. 

Common Reasons to Seek Power of Attorney for Elderly Parents

  • Financial Difficulties: A POA allows you to pay the bills and manage the finances for parents who are having difficulty staying on top of their financial obligations.

  • Chronic Illness: Parents with a chronic illness can arrange a POA that allows you to manage their affairs while they focus on their health. A POA can be used for terminal or non-terminal illnesses. For example, a POA can be active when a person is undergoing chemotherapy and revoked when the cancer is in remission.

  • Memory Impairment: Children can manage the affairs of parents who are diagnosed with Alzheimer’s disease or a similar type of dementia, as long as the paperwork is signed while they still have their faculties.

  • Upcoming Surgery: With a medical POA, you can make medical decisions for the principal while they’re under anesthesia or recovering from surgery. A POA can also be used to ensure financial affairs are managed while they’re in recovery.

  • Regular Travel: Older adults who travel regularly or spend winters in warmer climates can use a POA to ensure financial obligations in their home state are managed in their absence.

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