Creating a Power of Attorney

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Creating a Power of Attorney

What Is a Power of Attorney?

A POA is a legal document that provides a person, referred to as the attorney-in-fact or agent, the authority to make decisions and take action on behalf of another person, known as the principal. Having a POA established will help in instances where a loved one might be losing their ability to make financial or health decisions. Depending on the POA's terms, the agent will have either limited or extensive authority to make a legal decision about the principal's:

  • Healthcare
  • Finances
  • Property

Different Types of Power of Attorneys

There are various types of POAs, including:

  1. Non-Durable Power of Attorney

    This type of POA is used for a certain period of time and typically for a specific transaction where you grant them the authority to act on your behalf. After the completion of the transaction, the non-durable POA ceases.
  2. Durable Power of Attorney

    The durable POA is a bit more binding than the non-durable POA. It might be used for allowing the agent to manage the principal's affairs if they were to become unable to do so themselves. It doesn't have a set period, and it becomes effective right away once the principal becomes incapacitated. It does expire in the event of the principal's death, however.
  3. Medical Power of Attorney

    The medical POA grants the agent authority to take absolute control over the principal's medical decisions if they cannot do so themselves or if they become incapacitated. This typically becomes effective upon the presiding doctor's consent and allows the agent the authority to make all medical decisions for the principal.
  4. Limited or Special Power of Attorney

    This type of POA is used temporarily for one-time banking or financial transactions or selling a certain property. It is most frequently used when the principal cannot complete the transaction because of illness or prior commitments and wants to appoint the agent to act on their behalf.
  5. Springing Power of Attorney

    The springing POA becomes effective when a certain event occurs, such as your incapacitation. The springing POA must be extremely carefully crafted for avoiding any issues in identifying exactly when the triggering event occurred.

Steps to Create a Power of Attorney

There are certain steps you need to take to create a power of attorney. These include:

  1. Determining Your Needs to Help You Choose the Accurate Document

    You will first need to know the various types of POA documents available to you, and then consider which type of POA will fit your needs. Questions to keep in mind are:
  • Are you taking over another person's personal affairs or monthly expenses?
  • Will someone have to take over yours?
  • Will you need the help of a POA to sell your property?
  • Do you need or want someone to make business decisions for you?
  1. Determining the Agent
    Depending on the state, the agent might be called an attorney-in-fact. Either way, they will receive the legal authority outlined within the POA to decide on behalf of the other person (the principal). This should be an individual who is:

    • Responsible and trustworthy
    • Won't abuse this power
    • Make decisions in the best interest of the principal
  2. Filling Out the Document

    Once the needs have been determined and an agent selected, it is time to fill the document out. This is a simple process, but the document must comply with your state's rules.
  3. Signing the Document

    Sign the document properly to make it legally binding. Again, depending on the state, you might have to sign it in front of a notary and two witnesses. Make copies of the document and keep the original. Many institutions won't accept a photocopy of the document.


A power of attorney can be a reassuring way to protect your real estate and financial interests, medical needs, health, and maybe even the manner of your death. It’s important to understand the differences between the different types of POA’s and assess which type will best suit your needs.

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