Inform Article

What is a Power of Attorney and Do I Need One?

06.30.2010
Posted by Noelle Smith of Legal Aid Society of Palm Beach County
What is a Power of Attorney and Do I Need One? picture

Mary Miles is 76 years old with a chronic health condition. She has been advised by numerous people to create a Power of Attorney (POA) but is not sure what that means. Mary is worried that she won't be able to make decisions for herself if she creates a Power of Attorney. Below are some common questions related to creating a Power of Attorney that can help Mary and anyone else who is thinking about creating one.

What is a Power of Attorney?

A Power of Attorney authorizes someone else to act on your behalf in a legal or business matter. There are a few different types of Power of Attorney.

  1. General Power of Attorney: authorizes your chosen individual to act on your behalf in a variety of situations.
  2. Special Power of Attorney: authorizes your chosen individual to act on your behalf in specific circumstances only.
  3. Health Care Power of Attorney: authorizes your chosen individual to make health care decisions on your behalf if you are incapacitated.
  4. Durable Power of Attorney: the General, Special, and Health Care Powers of Attorney can all be made durable with certain text in the document. This means they will remain in effect even if you become mentally incompetent.

What can my chosen individual with Power of Attorney do?

1. General POA: the actions allowed under a General POA are very broad and can include:

  • Handling banking transactions
  • Entering safety deposit boxes
  • Buying and selling property
  • Handling transactions of U.S. securities (stocks, bonds)
  • Purchasing life insurance
  • Settling claims
  • Entering into contracts
  • Filing tax returns
  • Handling government benefits (Social Security, Disability, Unemployment)
  • Taking out a loan

Additionally, you can grant other powers including:

  • Taking care of business interests
  • Employing professional assistance
  • Making gifts
  • Making transfers to trusts

2. Special POA: you can authorize someone to do a specific task for you with a Special POA. Instances in which people have utilized a Special POA include:

  • Buying or selling a car
  • Handling banking transactions
  • Collecting debts
  • Borrowing money
  • Handling government issues

3. Health Care Power of Attorney: the person who is your Health Care Power of Attorney can make health care decisions on your behalf if you are unconscious, mentally incompetent, or otherwise unable to make such decisions yourself. A Health Care Power of Attorney is different from a Living Will in that it allows you to appoint someone to make these decisions for you. A Living Will allows you to express your wishes related to life-sustaining procedures.

  • Even if you have created a Health Care Power of Attorney, you still have the authority to give directions to doctors and other medical staff. This type of POA only becomes effective when you are no longer able to give or withhold informed consent related to your health.

What is an "attorney-in-fact?"

Attorney-in-fact is the term used for the person you have chosen to give authority to by your Power of Attorney. This term does not mean the person is or has to be a lawyer.

Important Facts:

  1. You must be mentally competent at the time of signing for the Power of Attorney to be valid. To be considered mentally competent, you must understand the different powers you are granting to your attorney-in-fact and what it means to delegate this decision-making authority.
  2. The Power of Attorney becomes valid as soon as you sign it. This means that your attorney-in-fact can immediately start making decisions and exercising the powers you have granted them.

For more information on the Legal Aid Society's Elder Law Project, click here.

IMPORTANT: The information on this Website is not intended as legal advice or representation. No attorney-client relationship is created between the Legal Aid Society of Palm Beach County, Inc. and any person obtaining information from this website. Public benefits and other laws change frequently. We strive to keep this website up to date but cannot provide a guarantee that this information is accurate as of the time you are reading it.