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What is a power of attorney?


With all the recent media coverage surrounding end of life and other important legal decisions the term "power of attorney" has frequently come up. But what does power of attorney mean?

Power of attorney is a legal document where an individual acting as the "principal" appoints someone else, the "agent," to provide the agent with legal authority to act for the principal in a certain way. The appointed agent can do any legal act that they are designated to perform and usually it involves medical decisions and financial decisions. The agent usually acts for the principal when the principal becomes incapacitated and unable to make decisions.

A principal can give the agent many different responsibilities. Agents can be in charge of bank accounts, managing real estate, managing investments and other financial matters. They can also be put in charge of medical issues as a medical power of attorney, acting on the principal's behalf to make important medical decisions. A power of attorney agreement ends upon the principal's death.

A power of attorney can be an important part of an individual's estate plan. The peace of mind that a trusted agent can bring can be helpful for the principal in case they become an incapacitated individual. A person who is granted power of attorney is usually a trusted family member or friend who is able to make good decisions on behalf of the principal.

This relationship can ensure that the principal's financial estate and medical care will be in good hands if the unthinkable happens to them. Although we hope to live our lives with full capacity sometimes tragedy strikes and it is important to be prepared for all situations. A legal professional skilled in estate planning can help a person establish a power of attorney and answer questions regarding the legal implications.

Source: AARP.org, "FAQ about power of attorney," accessed Jan. 21, 2015

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