The word "attorney" trips people up. Cornell's legal dictionary points out that the agent, also called an attorney-in-fact, need not be an attorney at law.
It matters most when something goes wrong, and it's one of the most state-specific documents there is: forms, signing rules, and agent duties all vary by state.
What a power of attorney is
According to Cornell, a power of attorney is an agreement between a principal and an agent that gives the agent the right to act for the principal, and agents are fiduciaries of their principals. Powers of attorney may be general, limited, or special. They are usually written, and many jurisdictions impose special requirements on their form or substance.
The CFPB explains what that means for a named agent: four basic duties, namely act only in the principal's best interest, manage money and property carefully, keep the principal's money separate from your own, and keep good records. The principal can still manage their own money while able to make decisions.
A power of attorney is not a will, and it isn't the same as a living will, which covers medical wishes. Cornell also notes that many legal documents, including powers of attorney, must be notarized, a rule that differs by state, so check how yours has to be signed.
What's on it
Powers of attorney come in several flavors. The variant you need depends on what the agent is meant to do.
| Variant | What it covers | Source and note |
|---|---|---|
| General | Broad authority over the principal's affairs | Cornell lists "general" as a type; scope depends on the wording |
| Limited or special | One task or a defined set, such as handling a single transaction | Cornell lists "limited" and "special" as types |
| Durable | Stays effective after the principal can no longer decide | Cornell: typical powers end on incapacity, but durable ones persist; the CFPB notes some states use "durable power of attorney" for the financial type |
| Health care (durable) | Names a health care proxy for medical decisions | NIA: one of the two common health care advance directives |
| IRS Form 2848 | Authorizes a person eligible to practice before the IRS to represent you | IRS: the representative can also receive and inspect your confidential tax information |
Whatever the type, check that it names the principal and agent, spells out the powers and any limits, and carries the signatures, notary, or witness blocks your state requires.
What to keep and for how long
Keep the signed original somewhere safe and known to at least the agent, and keep copies where the people who'll need them can find them. It's a working document, not one to file away and forget.
- While it's in force. Keep the original and a clear copy. The CFPB's guide stresses that agents keep good records of everything they do under it.
- After it ends. Authority ends when the principal revokes it or dies, and may end on divorce or legal separation if the agent is the spouse, or if a court names a guardian. The CFPB says the agent should promptly notify the banks or others they dealt with, and a principal who revokes should tell them too. Keep the document and the agent's records as the paper trail.
- Certified copies. In California, for example, a notary can certify that a copy of a power of attorney is true and correct (Probate Code section 4307), and the handbook says the certified copy has the same force and effect as the original. Other states have their own rules, so ask where you'll use it.
For where this fits among the papers worth having on hand, see important documents for seniors and the digital emergency binder. For what happens to paperwork after a death, see death in the family documents.
None of this is legal advice. Ask a lawyer or your state bar about the form your state requires.