What is Power of Attorney?

What is Power of Attorney?

The Power of Attorney (POA), gives one person, or agent, the authority to act for another person. This document can grant limited legal authority or broad legal authority to an agent. An agent can make decisions about the principal’s finances, property, or medical care. A Power of Attorney is frequently used when a principal becomes ill, disabled, or is unable to be present for signing financial and/or legal documents.

When planning for the future, a Power of Attorney is recommended. There are different types of POAs, and the type you choose depends on your specific needs. This post will discuss the most common: General Power of Attorney, Durable Power of Attorney, and Limited Power of Attorney.


When you have a General Power of Attorney, the attorney-in-fact (agent) acts on the principal’s behalf in all matters. Some of the issues authorized under a general POA include:

  • Handling bank accounts, check signing
  • Selling stocks and bonds
  • Selling property
  • Filing taxes
  • Other routine financial activities

Most Powers of Attorney allow for the representation of the principal in all financial and property matters if the principal is of sound mind. When the situation changes where the principal cannot make these decisions for themselves, a General Power of Attorney ends. However, anyone wanting a Power of Attorney to remain effective after health deterioration needs a Durable Power of Attorney signed.


If a principal becomes mentally incapacitated, the Durable Power of Attorney allows the agent to keep control of financial matters noted explicitly in the POA. The Durable Power of Attorney allows the principal’s agent to continue managing any financial affairs, such as signing checks, depositing social security checks, managing any investment accounts, and filing tax returns if the principal becomes incapable of making these decisions.

The General and Durable Powers of Attorney are often combined into one document. There may be specific instances where you would want to have two separate documents for each type of POA. Consulting with an experienced estate planning attorney can help you decide which option is best for you.

The General, Durable and General Durable POAs only apply to financial matters. They can authorize your agent to pay your medical bills, but they cannot authorize your agent to make health care decisions for you.


The limited power of attorney is a power of attorney that is executed for a very specific purpose. Examples include a power of attorney wherein the principal gives the attorney-in-fact the authority to (1) make retirement financial decisions, (2) buy and sell real estate, or (3) handle dad-to-day banking transactions. The biggest takeaway is to remember that an attorney-in-fact cannot act in a capacity not granted by a power of attorney.

Limited Powers of Attorney can also be restricted to a specific time frame. This can come in handy when you travel away from home.


Powers of Attorney become effective immediately upon signing or under specific circumstances. Powers of Attorney that are not effective immediately are called “springing.” Powers of Attorney are usually used in emergency situations. Having to wait for qualifiers to authorize your agent may cause complications. Make sure you discuss all your options with an estate planning attorney if you are considering the springing option.

A Power of Attorney is an essential tool for keeping your assets protected. Appointing someone to take care of your finances if you become incapable helps avoid the chance of a court appointing someone who may not have your best interests at heart. A power of attorney grants broad authority in handling your affairs, so appoint your agent wisely. It is advisable to choose a trustworthy POA agent. Choose a trusted friend or family member, or a reputable professional.

The Seda Law Firm has the expertise to help guide you in choosing the right power of attorney. Give us a call at 405.759.0678 or fill out our Contact Form

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