A Power of Attorney (POA) is a legal document that gives one person the power to act for another. The scope of the authority can vary, including the type of authority, when it is in effect, and how long it lasts.
The main POA documents are financial and health care POAs. A Financial POA allows the agent to manage financial affairs for an individual which can include paying bills, signing checks, filing tax returns, and managing some types of investment accounts.
Health Care POAs become effective when the principal can no longer make health-related decisions on their own. These documents can grant the power to an agent to make health-related decisions for them.
POA documents are in important part of an Estate Plan and should be reviewed regularly to make sure the agent appointed is still capable and able to manage financial affairs and/or health care decisions. It is also common for individuals to assign different agents different responsibilities, such as one agent for health care and another agent to oversee finances. This can ensure that one party does not have full control while also matching one’s expertise in certain areas with the responsibilities that they are assigned to ensure the financial and heath care wishes are properly handled.