What is a durable power of attorney (POA)?

Every day, you make important decisions about your possessions, healthcare, finances, and other vital areas of your life. But what might happen if you were suddenly unable to do this?

We do our best to be prepared, but sometimes unexpected things happen in our lives — like being injured in a car accident or receiving a medical diagnosis. You can safeguard against the problems and uncertainty these situations cause by establishing a durable power of attorney.

A power of attorney (or POA) is a legal document that lets you grant another person the authority to make decisions on your behalf. This person is called your agent, proxy, or attorney-in-fact. Generally, you can choose any adult that you trust to be your agent — including your spouse, an adult child, an attorney, a parent, or another family member.

An ordinary power of attorney expires the moment you become incapacitated (for example, if you were in a coma or under anesthesia). When a power of attorney is “durable,” it means your agent’s authority to act on your behalf continues even if you become incapacitated. Durable POAs are often used to prepare for a situation when important decisions need to be made, but you can’t make them yourself.

It’s worth noting that all types of POAs, including durable POAs, end when you pass away, so your agent will no longer have any legal authority. If you want to make a plan for your property after you die, consider making a last will and testament or a living trust.

Why do you need a durable POA?

Unexpected things happen all the time, which is why it’s best to be prepared. Durable POAs let you choose someone you trust to make important decisions if you're unable to. By having a POA, you can make sure your wishes are known and followed, giving both you and your loved ones peace of mind.

Here are just a few reasons you might want to create a durable POA:

• To prepare for a time when you might be incapacitated (for example, if you were in a car accident and fell into a coma)
• To put someone you trust in control of your healthcare and finances if you were unable to manage them yourself
• To prepare for a major medical procedure, especially one involving anesthesia
• In response to a degenerative disease diagnosis, like dementia or Parkinson’s

What can your agent do under a POA?

You get to decide how much power your agent has and which decisions they can make. There are different types of POAs, and each covers specific aspects of your life. Two of the most common types of durable POAs are medical POAs and financial POAs.

Durable medical power of attorney

A durable medical POA — also called a healthcare POA — lets you give someone the authority to make decisions about your medical care if you become incapacitated. These decisions could be about treatment options, medication, surgery, end-of-life care, and more.

A medical POA is different from a living will, which is a legal document that lets you outline your end-of-life healthcare preferences in case you’re unable to communicate them. With a living will, you dictate which medical treatments you do or do not want to receive. With a medical POA, you choose someone to make those decisions for you.

Durable financial power of attorney

A durable financial POA lets you appoint someone to manage your finances and property for you. These tasks could include paying bills, making bank deposits, collecting your insurance benefits, and making gifts to charity that are consistent with your previous giving patterns.

How to set up a power of attorney

Here are the basic steps to make your power of attorney:

1. Decide who you want to be your agent. Your agent will have a lot of authority, so you should choose someone you trust to act in your best interest. It’s a good idea to speak to this person beforehand and make sure they’re willing to serve as your agent.
2. Decide what authority you want to give your agent. What financial and medical decisions do you want them to be responsible for managing on your behalf?
3. Get a power of attorney form. Most states provide blank POA forms for free, but they aren’t always easy to tailor to your needs. You can also use free online software, like FreeWill, to create a durable financial power of attorney or a living will (which includes a healthcare power of attorney).
4. Complete the form and execute it according to the laws in your state. In most states, you’re required to sign your POA form in front of a notary. Some states also require additional witnesses.
5. Give a copy of your POA form to your agent and other interested parties, like your bank and medical office.
6. Keep your POA forms in a safe place with your other estate planning documents. This could be in a fireproof safe in your home, a safe deposit box, or at a trusted attorney’s office.
7. Keep your POA updated as your circumstances change.

You aren’t required to use a lawyer to create your POA. However, you may find it useful to consult with one to make sure your POA accurately reflects your intentions.

How to become an agent for a loved one

If you want to gain power of attorney on behalf of someone else — for example, an elderly parent — they have to name you as their agent by creating a power of attorney document, following the steps outlined above. For the POA to be valid, they must grant you this power of their own free will. In other words, they can’t be pressured or coerced into it. The person making it must also be of sound mind — meaning they can make important decisions and understand their impact.

There’s no way to become someone’s agent once they’re incapacitated — for example, if they have dementia. Instead, you can gain legal responsibility for them by becoming their conservator or adult guardian, which would require court proceedings to determine whether you’re suitable for the role.

A durable power of attorney creates peace of mind

Creating a POA may feel uncomfortable or unnecessary, especially if you’re currently healthy. But by planning ahead and being prepared, you can make sure important decisions are in the hands of someone you trust completely. And knowing what you want can be a relief for your loved ones, allowing them to make important decisions with confidence.

Feeling inspired? You can create a durable financial POA or a living will (which includes a healthcare POA) in less than 20 minutes.