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Power of Attorney: What You Need to Know

Summary: A power of attorney is a legal document that appoints an agent to make decisions on your behalf when you are unable to do so for yourself. There are several types of POA documents and you should weigh your options before choosing the best one for you.  Estimated Read Time: 9 min

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Table of Contents:

  1. What is a Power of Attorney?
  2. Different Types of Power of Attorney
  3. Durable Power of Attorney vs Power of Attorney
  4. Do I Need a Power of Attorney
  5. How to Get a Power of Attorney

As you age, it is imperative to have a plan in place to protect you if you are ever unable to make decisions for yourself. If you end up finding yourself in this situation, a power of attorney document will allow a trusted party of your choice to make important health and financial decisions on your behalf.

It is essential to appoint a power of attorney when you are healthy and in a stable state of mind. This will ensure that your true wishes are met if the power of attorney ever needs to take control of your situation. In this article, we review the reasons why you need a power of attorney, how to appoint a power of attorney, and more.

What is a Power of Attorney?

A power of attorney, or POA, is an estate planning document that appoints an agent to make decisions on your behalf if you are ever unable to do so yourself. The duty of your appointed agent is to make important health, legal, and financial decisions regarding your care, estate, and other engagements.

Typically, your agent is a trusted friend, family member, or caregiver. Sometimes, if you do not feel comfortable appointing a loved one, you are able to appoint an attorney to make these decisions on your behalf.

Different Types of Power of Attorney

There are various types of power of attorney documents, and the type of document you need will depend on the responsibilities you wish to give your appointed agent. The top five most common types of Power of Attorney include:

  • General POA
  • Medical POA
  • Durable POA
  • Limited POA
  • Springing POA

Each type of Power of Attorney will provide different powers to your agent. The type of POA you choose will depend on your needs and the powers you wish for your agent to hold.

General Power of Attorney

A general power of attorney allows the selected agent to make your day-to-day decisions such as business, real estate, legal, and financial decisions. This agent will also be trusted with paying your bills and ensuring your finances are up to date.

When appointing a general POA, it is important to choose a trustworthy individual. For instance, if you are in a coma for several days or weeks, it is the responsibility of this person to ensure your life outside of the hospital runs smoothly. Thus, when you recover, you won’t be walking into a mess.

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Typically, a general POA is a short-term situation and will expire when you regain the ability to do these actions and make these decisions for yourself.

A general power of attorney is useful for someone who may have several responsibilities on their plate and want to ensure nothing falls through the cracks while they are unable to make decisions for themself.

Medical Power of Attorney

When you create a medical power of attorney, you will appoint a health-care agent who will be in charge of making medical decisions in your place if you cannot do so for yourself.

This person is also in charge of ensuring your doctors and medical providers follow your wishes in terms of resuscitation and any health-related religious requirements you may have. Some responsibilities of your medical POA agent include:

  • Medical treatment
  • Surgical procedures
  • Healthcare facilities
  • Physicians
  • Release of medical records
  • Organ donation

Your medical power of attorney will become effective as soon as the document is signed. However, your medical POA agent will not have any control over your health situation until you are deemed unable to make decisions for yourself.

A medical power of attorney would be best for an individual who may not have many responsibilities outside of their own home and wish to have someone make medical decisions on their behalf when they cannot do so themself.

Durable Power of Attorney

 A durable power of attorney is a more long-term situation where your appointed agent is responsible for long-term decision making. This is one of the most common types of POA as most older individuals are encouraged to create a power of attorney document before they reach this stage in life.

A durable power of attorney agent will step in if you are deemed unfit to make decisions for yourself or are incapacitated based on your physical or mental state.

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When choosing a durable POA agent, it is essential to fully understand the implications and choose the best person possible for the job as they could be making your decisions while you are still alive and impacting your life.

A durable POA is best for someone who wants to ensure they have their day to-day-life taken care of regardless of their mental or physical state. This is one of the most common types of power of attorney documents.

Limited Power of Attorney

A limited power of attorney gives your agent the responsibility of completing a task or tasks on your behalf. You can specify tasks that the limited POA will need to complete. Once these tasks are complete, the agent is released of their POA duties.

You can task your agent with:

  • Cashing checks
  • Paying bills
  • Selling property
  • Taking care of pets
  • And more

There are no limits to the number of tasks or the number of agents you appoint. Once the tasks have been complete, the agent(s) will be discharged of their duties.

A limited power of attorney is likely used when an individual has several different tasks to complete and different individuals who they feel would best complete those tasks.

Springing Power of Attorney

A springing power of attorney is a type of durable power of attorney that “springs” into effect when a pre-determined event takes place. This means, for example, you can create a springing POA to take place if you are ever diagnosed with Cancer, ESRD, or on your 95th birthday, etc.

Your springing POA allows you to be in full control of your decisions until the event takes place. Once that event happens, your springing POA will be activated and your appointed agent will be in control of your decision making.

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A springing POA is not as common as other types of POA documents, but it is just as important that you choose a reputable and trustworthy agent if this is the route your decide to go. For example, if you choose your springing event to be a birthday, your POA will be in charge of your decision from that birthday for the rest of your life. You’ll want to choose someone who will always have your best interests in mind.

A springing POA would be useful in the event that an individual feels they are no longer able to provide the best care or make the best decisions for themselves without being medically incapacitated.

Durable Power of Attorney vs Power of Attorney

A durable power of attorney is a long-term power of attorney document whereas a typical power of attorney document is typically a short-term document that can expire.

Durable Power of Attorney Power of Attorney
Subject chooses their agent Subject chooses their agent
Can limit personal decision making Can limit personal decision making
Expires upon death Expires upon death
Remains in effect upon incapacity Expires upon incapacity

As you can see from the chart above, the main difference between a durable and non-durable POA is that a non-durable power of attorney expires upon incapacity. Thus, your agent will no longer be able to make decisions of your behalf.

Determining which type of power of attorney, you should create is an important step in the estate planning process. In general, if you wish to have your trusted individual continue to make decisions for you even after you are no longer mentally able to do so for yourself you should choose to create a durable POA.

On the other hand, if you choose a non-durable POA, your agent will not be able to make decisions for you once you are deemed incapacitated. Thus, your medical decisions will be made by the doctors and your care team.

Before determining the type of POA you crate, you should weigh all options to ensure you make the best decision for yourself and your estate.

Do I Need a Power of Attorney

Having a power of attorney is important for any individual. Although we never expect an emergency situation to occur, it is best to have a plan in place in the event an emergency does occur, and you need to ensure things are properly handled.

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Overall, creating a POA is a convenience for you. For example, if you are in the middle of selling your home and you fall into a coma, your POA can continue the process without delay. Or, if you need a lifesaving experimental emergency surgery, your POA can be there to ensure the surgery is in your best interest.

Having a power of attorney in place is one of the most important steps when planning your estate.

How to Get a Power of Attorney

Creating a power of attorney document a choosing your agent(s) is not a difficult process. However, it is important that you do not miss any steps along the way.

Step 1: Select Your Power of Attorney Type 

First, it is important to know the type of power of attorney you would like to implement. This is one of the most crucial steps in the process as you want to be sure the type of POA you create reflects your wishes.

If you find yourself torn between several types of POA documents, it is not uncommon to choose to create several POAs.

Step 2: Appoint an Agent(s)

Once you have selected the type or types of POA documents you wish to create, it is time to choose who you wish to act on your behalf. You can choose whomever you wish to act as your agent, but the most common selections are family members or close friends.

If you create several POA documents, you can select several agents. However, you’ll want to be sure the agents can work together seamlessly if the opportunity presents itself.

It is also a good idea to select alternative agents if your chosen agent passes away before their duties can be fulfilled. This way, you are not left without a POA in the event it becomes necessary.

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Step 3: Determine the Details of Your POA

Once you have selected the type of POA and your agent(s), you can then begin creating the details of your document. This is where you outline exactly which decisions your POA can make and the capabilities they have while you are unable to make the decisions or preform the tasks.

Step 4: Sign and Notarize the Document

Once you are satisfied with your power of attorney document, it is time to sign and notarize the document. For this step, you’ll need to review your states specific laws regarding notarization of a POA.

You may be required to sign in front of several witnesses.

Step 5: Provide Copies and Safely Store Your Copy

Once the POA has been notarized, it is time to create copies for every necessary individual. This includes you, the agent, and any other representative you wish to receive a copy to ensure the POA is fulfilled properly.

Once the copies are received, it is important to store your documents in a safe place where they can be easily located in the event the POA needs to become active.

Continue reading our estate planning guide to understand the importance of long term care when estate planning.

Sources

MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.

  1. Power of Attorney, American Bar . Accessed March 2024.
    https://www.americanbar.org/groups/real_property_trust_estate/resources/estate-planning/power-of-attorney/
  2. Power of Attorney (POA): Meaning, Types, and How and Why to Set One Up, Adam Hayes . Accessed March 2024.
    https://www.investopedia.com/terms/p/powerofattorney.asp
  3. What is a power of attorney (POA)?, CFPB. Accessed March 2024.
    https://www.consumerfinance.gov/ask-cfpb/what-is-a-power-of-attorney-poa-en-1149/
Kayla Hopkins

Kayla Hopkins

Content Editor
Kayla Hopkins is an accomplished writer and Medicare guru serving as the Editor of MedicareFAQ.com. Upon completing her Communications degree from Ohio University, Kayla dedicated her time to understanding the ever-evolving landscape of healthcare. With her extensive background as a Licensed Medicare Insurance Agent, she brings a wealth of knowledge and expertise to her writing.
Ashlee Zareczny

Ashlee Zareczny

Compliance Manager
Ashlee Zareczny is the Compliance Manager for MedicareFAQ. As a licensed Medicare agent in all 50 states, she is dedicated to educating those eligible for Medicare by providing the necessary resources and tools. Additionally, Ashlee trains new and tenured Medicare agents on CMS compliance guidelines. Ashlee is a Medicare expert who specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D education.

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