A power of attorney (POA) can help families plan for a loved one’s future care by naming someone to make financial, legal, or health care decisions if the principal becomes incapacitated or simply needs help as they age. But misconceptions about power of attorney can delay planning, lead families to rely on generic forms, or create confusion about an agent’s authority. Understanding what a POA can and cannot do helps families choose the right document, appoint a trusted agent, and know when to ask an elder law attorney for guidance.
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agent may be able to make specified financial, legal, or health care decisions for them if they become incapacitated because of dementia, a brain injury, or a condition that affects cognitive ability.
The person who creates the POA is typically called the principal. The person appointed to act on the principal’s behalf is called the agent.[01]
A POA can help your family prepare for a time when your loved one can no longer manage certain decisions. Your loved one may need both a financial POA and a health care POA because the documents cover different decisions.
“The worst-case scenario is when a person has no legal documents in place, they lose capacity, and family members fight over who’s going to be the one to make decisions,” says Melissa O’Connor, an estate lawyer and elder law attorney based in the Miami-Fort Lauderdale area.
No. Your loved one must be able to understand the POA and what it allows when they sign it. [02] For instance, a senior who has severe dementia likely won’t be able to sign a valid POA if they no longer understand the document or its consequences.
Once a person loses mental capacity, they cannot sign any legal document, including a power of attorney or living trust, according to Stuart Furman, an elder law attorney in Valley Center, California and author of The ElderCare Ready Book. [03]
This is why it’s important to complete a POA while your loved one still understands the document and choose who will act for them.
A generic power of attorney document found online may not account for important details, such as your loved one’s end-of-life wishes, their circumstances, or state requirements.
By working with an attorney who specializes in elder care, families can be confident that a power of attorney document will include:
Power of attorney documents that are vague or ambiguous can invite challenges and differing interpretations, Furman says. Because estate planning documents help guide a senior’s future care, they should come from a trusted source. And if a senior couldn’t understand the POA when they signed it, the document may be invalid or open to challenge.
“Everybody should make informed decisions, and I don’t know that people can understand the full breadth of their decisions if they don’t consult with an experienced professional,” says O’Connor.
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The opposite is true. By law, the person your loved one appoints must follow the POA, act in your loved one’s best interests, and avoid using the role for personal gain.
A POA document will typically list financial transactions that the agent is or isn’t allowed to make, including property sales, insurance transactions, and tax matters.
It’s important to carefully consider the person your loved one appoints. They should be trustworthy, dependable, and able to act with integrity.
This is false. In fact, there are several types of POA, each of which serves different circumstances and gives agents different levels of authority. Depending on the document and state law, a POA may be made durable so the appointed person can continue acting after incapacity.
The most common power of attorney types include:
This type can give the person your loved one appoints broad authority over financial and legal matters, and is sometimes used for a short period of time, such as when a person is traveling. It terminates when the principal dies or becomes incapacitated. [04]
This POA lets an agent make only certain decisions or take a specified action on behalf of the principal.[05]
This power of attorney allows an agent to manage health decisions should the principal become incapacitated.[06]
Depending on how the POA is written, the person your loved one appoints may act right away or only after a specified event.
The person your loved one appoints can act as soon as the POA is signed and can continue acting after incapacity.
The person your loved one appoints can act only after an event defined in the document, such as incapacity.
| Type of power of attorney | What it covers | When it applies |
|---|---|---|
| General financial POA | Broad financial and property decisions | Usually takes effect when signed and ends if revoked, when your loved one dies, or upon incapacity unless it’s durable. |
| Limited (special) POA | A specific task or limited authority | Takes effect as described in the document and ends when the task is completed, the authority is revoked, or your loved one dies. |
| Health care POA (or health care proxy) | Health care decisions when your loved one can no longer make or communicate them | Usually takes effect when the person loses decision-making capacity and ends if revoked or when they die. |
Note: The names of power of attorney documents and requirements vary by state.
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Consider consulting an elder law attorney if your loved one has complex finances, specific care wishes, or questions about which POA they need. An attorney can explain state requirements, define the appointed person’s authority, and help your loved one complete a POA while they still can.
No. A POA ends when the principal dies. Estate matters are then handled by the personal representative named in the will or appointed by a court.
No. Durable means the POA remains effective after incapacity. A medical or health care POA specifically covers health care decisions.
It depends. Naming separate financial and health care agents can reduce the workload for each person, but naming one person may make coordination easier.
Rains, S. (2017, March 31). Pick the right power of attorney instrument. American Bar Association.
Legal Information Institute. Cornell Law School. Incapacity.
Furman, S. (2015). The ElderCare Ready Book. Wheatmark.
National Council on Aging. (2026, March 29) What is power of attorney? Types, uses, and when you need one.
Legal Information Institute. Cornell Law School. (2022, January) Limited power of attorney.
Legal Information Institute. Cornell Law School. (2022, April) Health care directive.
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