What Is Power of Attorney?

 In Estate Planning, Insurance Advice

Most people know it’s important to have a will to make sure your wishes are carried out after you pass away.

But what happens if you become unable to make decisions or communicate them to others while you’re still alive? Families face a great deal of stress and heartbreak when they must make difficult decisions about a loved one without that person’s input.

This is why power of attorney (POA) is an essential part of any estate plan. Unfortunately, many people are unsure of what a POA means or what it entails.

According to estate planning attorney Will Worsham, power of attorney is simply a legal document. Its purpose is to appoint one person (the agent) to handle certain matters on behalf of another (the principal). The power of attorney document uses careful and intentional wording to clearly outline which powers the agent will have. A lawyer who specializes in powers of attorney can help craft a document that protects the principal, their assets, and their wishes.

For the document to be valid, the principal must be mentally competent at the time they sign it. They must also be signing it free of coercion or trickery.1 Worsham also points out that all powers granted to the agent under a durable power of attorney end with death of the principal.

In this article, we’ll go over some of the basics when it comes to understanding power of attorney. You can learn more by attending The Resource Center’s free monthly estate planning workshops hosted by Worsham.

Power of Attorney vs. Durable Power of Attorney

Some people mistakenly believe the terms “power of attorney” and “durable power of attorney” are interchangeable, but they are not.

Normally, a power of attorney is only valid as long as the principal has the capacity to perform the functions granted in the document. In other words, if the principal becomes incapacitated, a nondurable power of attorney is no longer enforceable. 

For estate planning purposes, Worsham explains that a special type of document is needed, which is known as a durable power of attorney. Under a durable power of attorney, the powers granted to the agent remain in effect even if the principal becomes incapacitated. This is the document that allows the agent to manage your affairs if you are unable to do so for yourself.  

A durable power of attorney may become effective either (1) immediately when it is signed or (2) only if the principal becomes incapacitated. The second option is known as a springing durable power of attorney.2  

General Power of Attorney

A general power of attorney is used for non-medical matters, such as legal or financial decisions. 

In some cases, the agent is given broad authority to make a wide range of decisions on behalf of the principal. At other times, the agent may be restricted to specific activities, such as paying bills or completing real estate transactions.3 Other powers an agent might have include buying or selling equities, opening or closing accounts or signing documents.4  

Medical Power of Attorney

A medical power of attorney gives the agent the authority to make medical decisions if the principal is either incapacitated or unable to communicate.4 It is not the same as a living will, which assigns an agent to make end-of-life decisions if you are unable to do so.1 

A medical power of attorney may be used temporarily, such as if the principal is under anesthesia. It may also be used for long-term scenarios, such as if the principal is in a persistent vegetative state. The agent may be given authority over a range of medical decisions such as personal care management and considering different treatment options.5 

Assigning Power of Attorney

Many people assign power of attorney to a close relative, such as a spouse or adult child. Other options include close friends or professional advisors with special subject-matter knowledge.4 You may assign both general and medical power of attorney to the same person, or to different individuals.5 

Worsham offers a number of criteria to consider when selecting an agent. They include trustworthiness, decision-making acumen and availability. He also suggests to consider selecting alternates.


First and foremost, the primary consideration is someone you can trust. 

In a power of attorney relationship, the agent’s top priority is carrying out the wishes of the principal. The person you assign must be emotionally prepared to do this, even when faced with pressure to do otherwise.4 

Decision-Making Ability

Secondarily, you want someone with the acumen to make good decisions. 

If it’s a financial power of attorney, consider whether they have a history of making smart financial decisions.1 Do they pay their own bills on time? Do they avoid excessive debts? Or do they have a habit of overspending? 

For a medical power of attorney, does the person have some understanding of medical processes? This doesn’t mean they have to be a doctor or nurse. You want someone who will ask the right questions about medical tests, prognosis and proposed treatments. Your agent must also be willing to challenge suggested treatments that go against your wishes.6 


Choose an agent who will be available when their services are needed. Make sure they are fully prepared for the responsibilities they’re taking on for you. As noted earlier, they must be able to make difficult decisions in stressful situations without feeling overwhelmed. 

For a medical power of attorney, choose someone who lives in close proximity to your hospital or preferred care facilities. They will need to be able to get there quickly in an emergency.6 


One common mistake to avoid is failing to name alternates. What happens if your first choice passes away or becomes incapacitated themselves?7 Always select at least one additional person who would be willing and able to serve as your agent. 

Update Regularly

Finally, Worsham offers a reminder that your power of attorney needs to be updated at least once every five years. Many places won’t accept an out-of-date power of attorney document. You’ll also want to revise if you move to a different state or city, or if you acquire property in multiple states.3  


Durable power of attorney helps to ensure that your needs are met and wishes carried out if you become incapacitated. It eases the stress on your loved ones over how to manage your affairs if you are unable to speak for yourself.

Do you have questions about power of attorney or other estate planning topics? Are you looking for help getting started? 

If so, we invite you to register for one of our free monthly workshops on Estate Planning Basics. We’ll simplify the process so you can make wise decisions for taking care of yourself, your family and your legacy.


Interested in Learning More About Estate Planning?

At The Resource Center, we’re dedicated to helping individuals and families with their financial needs. Through comprehensive estate planning strategies, we strive to help you pass on your legacy and help ensure your beneficiaries will be taken care of when the time comes to enact a will, trust or in utilizing the power of attorney. With The Resource Center’s estate planning services, our team will help inform you on the planning options which may be useful as we guide you in creating a strategy designed to work when your loved ones need it.  Have the confidence that your personalized Estate Planning strategy can help meet your current needs, work toward your long-term goals, and help protect you and those you love.  If you’re interested in learning more about estate planning, sign up for The Resource Center’s free, monthly meeting.



1: https://www.totallegal.com/financial-and-medical-power-of-attorney

2: https://www.legalzoom.com/articles/what-is-a-durable-power-of-attorney

3: https://www.aarp.org/caregiving/financial-legal/info-2019/types-of-power-of-attorney.html

4: https://www.aplaceformom.com/caregiver-resources/articles/power-of-attorney-guide

5: https://www.investopedia.com/articles/managing-wealth/042216/medical-vs-financial-power-attorney-reasons-separate-them.asp

6: https://www.verywellhealth.com/characteristics-for-choosing-power-of-attorney-4134991#:~:text=Most%20people%20select%20their%20spouse,represent%20your%20wishes%20the%20best.

7: https://www.forbes.com/sites/christinefletcher/2019/09/12/9-things-you-need-to-know-about-power-of-attorney/#3c006c3b65b9


Neither the firm nor its agents or representatives may give tax or legal advice. Estate planning services are offered by Will Worsham or Worsham Law Firm.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.  

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.  

 Our firm is not affiliated with the U. S. government or any governmental agency. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and The Resource Center are not affiliated companies. #700574

Recent Posts

Start typing and press Enter to search

Piggy bank next to a yellow toy car