What Is a Power of Attorney and Why Do You Need One?

A Power of Attorney is one of the most important — and most overlooked — legal documents an adult can have. Here is what it is and why you should not wait to create one.

What Is a Power of Attorney?

A Power of Attorney (POA) is a legal document that authorizes another person (called the agent or attorney-in-fact) to act on your behalf in financial, legal, or medical matters. The person granting the authority is called the principal.

Types of Powers of Attorney

A general POA covers broad financial and legal decisions. A limited POA covers specific transactions. A durable POA remains in effect even if the principal becomes incapacitated — making it especially important for long-term planning. A healthcare POA (or healthcare proxy) authorizes someone to make medical decisions on your behalf.

Why You Need One Now

If you become incapacitated without a POA in place, your loved ones may have to go to court to obtain guardianship or conservatorship over you — a process that is expensive, time-consuming, and public. A properly drafted POA prevents that.

Choosing Your Agent Wisely

Your agent will have significant power over your affairs, so choose someone you trust completely — someone who is responsible, organized, and willing to act in your best interest even under difficult circumstances.