Durable Power of Attorney: 6 Important Questions, Answered

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What would your family or loved ones do if you were injured or ill and unable to manage your own finances? Who would pay your mortgage, make decisions about your investments, or deal with your medical bills? A durable power of attorney is a legal document that addresses this exact situation. But what does it do, exactly, and how do you get one? Answers to these questions and more ahead.

What is a durable power of attorney?

This important document empowers an appointed agent (also known as an attorney-in-fact) to make financial and legal decisions on your behalf.  It’s durable because it remains in effect even if you become incapacitated for any reason. So if you are unable to manage your own affairs for any reason—for example, you’re unconscious in the hospital, or you develop severe dementia—your agent can step in and pay your bills or file your taxes, deposit checks in your bank account, manage your investments, handle insurance issues, and make many other important decisions.

You’ll also want to have a separate durable power of attorney for health care, or health care proxy, which appoints someone to make medical decisions on your behalf if you can’t speak for yourself. You can have the same person fill both of these roles, or choose different people if you think that the best person to make decisions about your medical care is not the best person to manage your finances. (But if you do pick two different people, make sure they can work well together.)

Why do I need to worry about it now?

The point of a durable POA is to do it while you’re well and when you don’t actually need it. Because it stays in effect after you’re unable to take care of yourself, you’ll allow a seamless transfer of responsibility without leaving your loved ones to figure out who will pay your bills, make your health decisions, or protect your assets.

Another reason you don’t want to leave this decision until you’re in frail or declining health: If someone suspects that you’re no longer able to make the decision on your own, or that you’re being influenced to appoint a particular person, a court may declare your document invalid.

Am I signing away control of my whole life?

While a durable power of attorney typically goes into effect right away, you’re not handing over the reins to your agent. You still have the right to control your life, your money, your property, and your assets. And you can always override your agent, if you’re of sound mind.

Another option is to pick what’s known as a springing power of attorney. With a springing power of attorney, the authority to act on your behalf only kicks in after a doctor certifies that you’re incapacitated. (One drawback to keep in mind: That extra step can sometimes create delays.)

Can I choose more than one person?

If an aging parent has more than one adult child who is capable of serving as their agent, they can consider assigning co-agents. But most experts don’t advise it, as it means two signatures are always required to make any decision. That can become a time-consuming headache, particularly if the siblings don’t live near each other.

Instead, experts suggest naming the child who leaves nearest to you and may be most hands-on with your care as the initial agent, and then having another child or family member listed as a backup. It’s always smart to have a backup agent, in case something happens to the initial agent, and he or she isn’t able to carry out the duties of the POA.

How do I create a power of attorney?

There are plenty of online POA forms you can print out and sign, but most experts advise against a DIY approach. While it may be simple, this is a legally binding action, so you’ll want to hire an estate planning lawyer to help you think through the nuances of your situation, which may depend on your financial position and how you’ll want those assets managed if you can’t make the decisions yourself. You’ll have greater peace of mind—and fewer potential hiccups—if you work with an attorney. You can browse attorneys near you using our service finder:

Can I change my mind?

You are allowed to revoke your POA as long as you’re still of sound mind when you do it. The process is similar to creating a POA: You fill out a form, get it signed in front of a notary, then deliver it to the former agent as well as any third parties, like your bank, that have been notified about your former agent’s POA.

One thing to keep in mind: If you sign a new POA with a new agent, the old one isn’t automatically rendered inactive. You’ll need to go through the process of formally revoking a previous POA before creating a new one.

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