How to Make a Power of Attorney

This article explains the different types of power of attorney and walks you through each step to create a POA. You'll also find useful links to help you along the way.

1. Decide What Kind of Power of Attorney You Need

A power of attorney document lets you name a trusted person, known as your attorney-in-fact or agent, to act on your behalf. The type of POA form that's right for you depends on a number of factors, including whether you need help now or in the future, and exactly what you want your agent to do for you.

Durable Power of Attorney for Finances

A durable power of attorney for finances allows your agent to manage your money if you can't. It's called durable because it stays in effect even if you become unable to make decisions. This can give you peace of mind for the future.

When you make a durable power of attorney, you can choose when you want it to take effect:

• Immediately Effective Power of Attorney. If you make your durable power of attorney effective immediately, it begins as soon as you sign it. Your agent can take action for you right away, without jumping through hoops to prove you lack the capacity to manage your own affairs.
• Springing Power of Attorney. This type of durable power of attorney becomes effective only after a specific event occurs—usually, this is when you become incapacitated. While this may sound helpful, it can lead to delays in handling your finances.

For more information about durable powers of attorney for finances, including guidance on the question of whether to make an immediately effective or springing document, see What Is a Durable Power of Attorney for Finances? and When Does a Durable Power of Attorney Take Effect?

Durable Power of Attorney for Health Care

In addition to a durable financial POA, you may also want to make a durable power of attorney for health care, sometimes called a health care proxy, advance directive, or medical power of attorney. This important document names a person you choose to be sure your health care wishes are carried out if you're unable to speak for yourself.

It's best to keep financial and medical powers of attorney separate: You don't need your financial contacts to know your medical wishes and vice versa. You may also want to appoint different individuals to oversee these essential aspects of your life. Like a durable financial POA, your health care POA can start right away or only if you can't make your own decisions.

General Power of Attorney

A general power of attorney lets your attorney-in-fact manage all your financial and legal matters, but usually not your health care. People often use this type of power of attorney for a limited time, such as when traveling or needing short-term help. It usually lasts for a set period or until you cancel it.

Technically, a durable power of attorney for finances that grants every possible financial power is also a type of general power of attorney, but it's easier to keep the terms separate.

Limited or Special Power of Attorney

A limited power of attorney, also known as a special power of attorney, lets your agent handle a specific task for you. For instance, you might need help closing a real estate deal while you're away or want someone to represent you in business if you can't be there. A limited POA only covers what you need and ends when the job is done.

2. Choose Your Attorney-in-Fact or Agent

Choosing your agent is the most important step when making a power of attorney. Pick someone you trust who is near enough to step in when needed.

Usually, any adult who is capable can be your agent; they don't need to be a lawyer. (But see the special rules for health care agents, below.) If you're married, you'll probably name your spouse as your agent. If your spouse is unable to do the job because they're ill or otherwise unavailable, you can avert potential conflicts by appointing someone your spouse would also choose.

Talk to the person you want to name and make sure they agree to take on this role. If they are not willing or don't know about the document, it could cause confusion or delays.

It's usually best to name only one agent. If you have more than one, disagreements can make things harder. Most banks also prefer to deal with a single agent.

Financial POA agent. Keep in mind that an attorney-in-fact does not require extensive experience in financial management; honesty, common sense, and reliability are generally sufficient. If necessary, your attorney-in-fact can get professional help—from an accountant, lawyer, or tax preparer, perhaps—and pay for it out of your assets.

For detailed guidance on choosing an attorney-in-fact to manage your finances, see Choosing an Attorney-in-Fact or Co-Attorney-in-Fact.

Health care POA agent. Besides the willingness and ability to carry out your health care wishes, there are particular rules a health care agent must satisfy. Most states don't permit health care providers or care facility employees to serve unless you are related. Learn your state's rules before finalizing your document.

3. Specify the Powers You Want to Grant

When you set up a POA, you can give your agent many different powers. It's essential to understand the meaning of each one. By law, your agent must always act in your best interests.

A durable or general power of attorney for finances will often include the following powers:

• Paying your bills
• Filing and paying your taxes
• Collecting benefits from Social Security, Medicare, or other government programs
• Managing your retirement account
• Overseeing your investments
• Maintaining or otherwise looking after any real estate you own

To learn more about these and other financial powers, see What Powers Can a Financial Power of Attorney Include?

For a health care power of attorney, powers can vary widely but may include:

• Managing the details of your day-to-day treatment
• Authorizing the withdrawal of life-sustaining procedures if you have expressed this wish and are close to death
• Authorizing organ donation
• Directing the disposition of your remains

4. Draft the Power of Attorney Document

There are several ways to make a power of attorney. You can use a state form, an online tool, legal software, a lawyer, or a mix of these. If you draft your own POA, be sure it follows your state's rules.

Some states require powers of attorney to contain specific language to be considered valid and legal. And all states have rules regarding the finalization of POA documents, which typically require a signature, notarization, and, in some cases, the presence of witnesses, as discussed below.

A good DIY power of attorney program will walk you through each step. If you have questions, ask an experienced lawyer.

5. Make Your POA Legal: Signing, Notarization, and Witnessing

To finalize a power of attorney, whether for financial or health care matters, you must sign the document. (Some states also require your agent to sign before taking action under the document.) Other rules vary from state to state. You may need to sign the POA in front of:

• a notary public
• one or two witnesses, or
• a notary public and one or two witnesses.

For more details about finalizing a durable power of attorney for finances, see Signing and Notarizing a Durable Power of Attorney.

6. Distribute and Store Your POA

What you do with your finished power of attorney depends on the type of POA you made and when it starts. Here are some general tips.

Give your POA to your agent. If your agent will start using the power of attorney immediately, give them the original document. If you made a durable power of attorney that won't take effect until later, you may choose not to give the original document to your agent now. You may wish to give them a copy now and make sure they can easily access it when the time comes.

Record your POA. If you made a financial POA giving your agent power over real estate, you must put a copy of the document on file in the land records office of the county where the property is located. This process is called recording or registering, depending on the state. For more information about recording your POA, see Signing and Notarizing a Durable Power of Attorney.

Distribute copies to others. If you made a health care POA, you may want to provide a copy of the POA to the doctors, HMO, or other medical facilities where you expect to be treated. For financial powers of attorney, you can give copies to the people your agent is most likely to deal with— for example, banks or government offices. If your power of attorney won't be used unless and until you become incapacitated, however, it may seem premature to give copies of the document to others. It's up to you.

Keep a list of everyone who has a copy of your document. If you ever cancel it, notify each person and organization.

7. Review and Update Your POA as Needed

If your power of attorney might not be used for a long time, it's smart to make a new one every five to seven years. Even though a durable POA doesn't expire, an old one can be harder for your agent to use.

It's especially important to review your power of attorney after significant life changes. For example, if your agent is your spouse and you divorce, or the person you named as your agent moves far away, becomes ill, or is no longer closely involved with your life, you should revoke your power of attorney and make a new one appointing someone else to serve.

For more information about revoking a power of attorney, see When a Power of Attorney Ends.

Making Powers of Attorney with WillMaker

Did you know that Quicken WillMaker can help you make several types of POAs? Learn more in WillMaker's legal manual.