Power of Attorney

Updated on January 5, 2024
Article byAswathi Jayachandran
Reviewed byDheeraj Vaidya, CFA, FRM

Power Of Attorney Definition

A power of Attorney (POA) is a legal written authorization that an individual signs designating someone else as their agent. The document allows the designated person to represent or handle legal, tax, business, and financial issues on that individual’s behalf if the said person cannot do so.

What is a Power of Attorney?

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They are helpful in situations where individuals cannot be present or act at the time of the anticipated incident. It may be due to absence or disability, and the limitations could be permanent or temporary, such as travel difficulties, accidents, or illness. It could also be enabled for convenience.

Key Takeaways

  • A power of attorney (POA) is a legal document that grants one person, known as the agent, the right to make decisions on certain aspects of another person’s life (principal).
  • It is carried out for convenience and as a precaution against unforeseeable adverse events.
  • The documents cease to exist once the principal person’s life comes to a halt.
  • In general, there are two types of POA. A durable POA is an effective document even if the principal becomes disabled or incapacitated. On the other hand, springing POA takes effect immediately after the principal’s illness or inability.

Power of Attorney Explained

A power of attorney delegates authority to one or more people to serve as agents for the interested party. The individual who gives the decision-making power to another is the principal. The designated one is referred to as the “attorney-in-fact.” Therefore, the “attorney-in-fact” is the authorized agent who makes decisions on behalf of the individual or the principal.

Such an agent can be family, a friend, or any acquaintance and need not necessarily be a lawyer. The power may only apply to a specific activity, like concluding the sale of property, or it may have a broader application. The authority may provide the agent temporary or ongoing power to act on their behalf.

Generally, when a POA is exercised, the agent has to present the document that authorizes them to act or represent the principal. However, it can be essential for a court to mandate it or appoint one or more people to act on an individual’s behalf if they lack power of attorney and find themselves unable to manage their personal, financial, or business affairs. Depending on the local state law, individuals chosen in this way may be called committees, guardians, or conservators.

A POA will cease to exist upon the death of the principal. It is, therefore, no longer valid when the person dies. Another factor to remember here would be that some POAs can come with an expiry date. This is done to limit the authority exercised by the agents of the document.

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Let us look at the different types of POA.

#1 –  Durable Power of Attorney

A durable power of attorney comes into effect as soon as the document is signed. It remains valid even after the principal becomes incapacitated or ill at a later point in time. As per the regulations of state laws of the U.S., they frequently necessitate the use of the phrase to be mentioned for the same. However, it is possible to designate a POA as “non-durable” if the individual does not want it to stay in force while they are ill. This is where the springing power of attorney comes in.

#2 – Springing Power of Attorney

This category of POA becomes effective at the point where the individual becomes incapacitated. It means it cannot be invoked before the principal gets ill or incapacitated. If a springing power is employed, the principal shall indicate the manner, and the specific time it shall come into effect in the springer. More often than not, durable powers of attorney are preferred as springing POA is difficult to deal with.

#3 – Specific or Special Power of Attorney

Specific or special power of attorney limits the agent in terms of execution. The agents can only exercise certain rights under the regulations specified in the document. For example, in the medical power of attorney, the person may be given the authority to decide whether to continue the treatment of the principal.

A finance POA gives a person the authority to deal with financial matters. Similarly, lasting power of attorney can help make choices regarding a person’s living arrangements and medical treatment. Like all POAs, the Lasting power of attorney or financial or medical POAs also ends after the principal’s death.

#4 – General Power of Attorney

This has a broader perspective compared to specific POA. Here the agents can step in to handle the individual’s personal and professional affairs. Documents mentioning the purpose shall be created using forms for power of attorney available online, even if they are general.


A POA gives the agent the power to act on the principal’s behalf when the person is not present. In certain situations, the agent cannot be given any authority that conflicts with the laws and rules that apply to the people and businesses that the agent deals with. The POA cannot give the agent authority to carry out specific acts without the principal. For instance, if a bank has rules stating that the principal must be physically present in the bank, it shall be done as necessitated.

Frequently Asked Questions (FAQs)

1. How to get power of attorney?

The first step to getting a POA is choosing the agent and deciding the responsibility to be borne. The next step is drafting the document, for which online forms for power of attorney can be utilized. Finally, it must be saved after drafting. Getting an experienced attorney can also help.

2. Who can override a power of attorney?

POAs are revocable by the principal if they are of sound mind. Sometimes, it can be instigated by friends and family. Therefore, it is crucial to adhere to the formal procedures for dismissing an agent and appointing a new representative who can handle these duties on behalf of the principal.

3. Can power of attorney change a will?

A POA cannot revoke or modify an existing will as long as it is still valid. Even if the principal’s POA document clearly states otherwise, this is beyond the extent of their power. Any will created by a power of attorney is inherently void.

4. Does the power of attorney end at death?

A durable power of attorney takes effect when an individual signs it. It is executable from that event and shall last until the principal dies or withdraws it.

This has been a guide to Power of Attorney and its meaning. Here, we explain it in detail, including its types and limitations. You may also find some useful articles here:

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