← Caregiver glossary · Legal + administrative
Also: POA · durable POA · financial POA
A legal document where one person (the "principal") authorizes another person (the "agent" or "attorney-in-fact") to act on their behalf in financial matters. "Durable" means the POA remains in effect after the principal loses capacity — which is exactly when families need it most.
A durable financial POA gives the named agent the authority to pay bills from the principal's accounts, manage Social Security and pension deposits, file taxes, manage real estate, deal with banks and insurance companies, and (depending on the state and the specific document) make gifts or move assets for Medicaid-planning purposes. The agent has a fiduciary duty — they must act in the principal's interest, keep records, and not commingle funds. Banks and brokerages often have their own POA forms in addition to the state-standard one; for accounts that matter, presenting both forms eliminates 90% of the friction. The POA expires when the principal dies; after that the executor (named in the will) takes over.
Most states have a statutory short form that's acceptable everywhere. Some specific powers (gifting, changing beneficiaries, transferring real estate) must be explicitly granted — they don't come along for free. An elder-law attorney charges $500-$1,500 for a properly drafted durable POA + healthcare proxy + advance directive package; it's the most consequential legal expenditure most families will make pre-crisis.
The single most important legal document a family should set up while a parent still has capacity to sign. A non-durable POA is useless for caregiving purposes; specifically request a DURABLE POA.
Terms families frequently confuse with power of attorney.
A financial POA covers money decisions; a healthcare proxy covers medical decisions. Most states require these to be SEPARATE documents. Setting up only a financial POA without a healthcare proxy leaves a gap exactly where families need it most.
Guardianship is a court-ordered arrangement where a judge appoints someone to make decisions after the patient has lost capacity. A POA is a contract the patient signs in advance while they still have capacity. POAs are much cheaper, faster, less invasive, and don't require a court — which is why elder-law attorneys urge families to set them up before the window closes.
Executor authority begins at death; POA authority ends at death. They cover different windows of time. Most families need both: a durable POA for the years of declining capacity before death, and an executor named in the will for the post-death estate administration.
See also: all glossary terms · conditions by name · step-by-step playbooks