A power of attorney (POA) is a legal document that allows someone else to act on your behalf in private affairs, business, or some other legal matter. A POA can be used for various purposes, including financial, health, and welfare matters. A POA can be helpful for older people and others who want to plan for the future, including the possibility that they may be unable to make important financial decisions due to dementia, traumatic brain injury, or another impairment that could affect their mental function.

There are different types of POAs, including:

• General POA: This allows the agent to make decisions about legal, health, and financial transactions, including opening and closing bank accounts, buying or selling stocks, filing tax returns, buying or renewing insurance policies, and making healthcare decisions. A general POA offers the agent broad power.

• Medical POA: This allows the attorney or attorneys-in-fact to make healthcare decisions for the principal if they are unable to. This common legal document is used in emergency situations. The person selected will be required to follow the principals previously stated medical wishes, including in their living will.

A POA must be signed by both parties and witnessed by a third party. It is important to exercise caution when using a standardized POA form obtained from a source other than a lawyer because there is considerable variation in approved formats among the states. A POA cannot grant powers to the agent that conflict with rules and regulations governing people and companies that the agent deals with.

If someone does not create a POA in advance, a friend or family member might have to go to court to have a guardian appointed if they become incapacitated and are no longer able to make decisions for themselves – and that process can be lengthy, expensive, and very public.