What is a power of attorney?

A power of attorney, also called a POA, is a document where one person appoints another person to act on their behalf with respect to certain matters, such as medical, financial, real estate, and business transactions.

When to use a power of attorney

• You want to give someone permission to act on your behalf      
• You want to appoint an agent to manage your financial, business, real estate, or other personal affairs      
• You want your agent to have the power to act for you if you become incapacitated and can no longer speak for yourself

How to create a power of attorney

1. 1. Understand which type of power of attorney you need

   To begin, you need to determine whether you wish to complete a medical, durable, or general power of attorney. Under any power of attorney, the person creating and signing the document—the "principal"—appoints another person—the "agent" (a.k.a. the attorney-in-fact)—to manage specific matters on the principal's behalf.

2. 2. Name your agent

   Your appointed representative, often called an agent, is legally bound to follow your instructions and act on your wishes. Choose someone trustworthy, typically a close friend or family member.

3. 3. Decide on the powers you want to give your attorney

   The principal may choose to provide a blanket authority to the agent, allowing them to handle any matter on their behalf. In this case, your form will still provide an itemized list of powers. Banks, hospitals, and other organizations will sometimes only accept a power of attorney if it specifically states the power the agent is trying to exercise. If the principal does not provide total authority, you may select from the following specific powers or add specific acts such as the following:

   • Property: Real estate, physical items
   • Finances: Banks and financial institutions, taxes, businesses, personal and family maintenance, benefits from governmental programs and civil or military service
   • Assets: Stocks and bonds, insurance and annuities, retirement plans
   • Estate: Gifts, establish, contribute to, and manage properties, trusts, and other beneficial interests
   • Legal Affairs: Claims and litigation
   • Miscellaneous: Support the principal's pets, manage the principal's funeral and burial arrangements, power to take all other actions on the principal's behalf.

4. 4. Add special instructions (if needed)

   You also have the option of including any special wishes, terms, restrictions, or instructions. It is a good idea to include any general goals, even if they have already been communicated to the agent orally.

5. 5. Review and sign

   The principal, witnesses, and notary should all see each other sign in person. Since banks and other institutions often require powers of attorney to be notarized, we recommend that you use a notary even if your state does not require it. 

Other documents included

Notice to Person Accepting the Appointment as Attorney-in-Fact - This notice is attached to the form and acknowledges that the agent understands their duties and responsibilities. The agent should  carefully read the power of attorney and this notice prior to signing and accepting the nomination as agent. The agent is advised to find legal counsel if they have any questions or concerns.

Notary Acknowledgment - Although not always required in every state, it is recommended that you use a notary to witness the signing, which will help prove the authenticity of the power of attorney should it ever be disputed in court.

Statement of Witness - Here, the witnesses sign a statement affirming the principal's identity, that they signed the power of attorney in the witness’ presence, that they are of sound mind and memory, that the signature was not procured fraudulently, and that the witness or witnesses are not serving as agents (i.e. meaning that they are disinterested parties without any conflicts of interest).