Durable power of attorney — what it actually does

A power of attorney (POA) is a document that authorizes someone — your "agent" — to act on your behalf. Most people have heard of it; few have signed one until the moment they wished they had. The day a POA becomes urgently necessary is the day you can no longer sign one. By definition, anyone competent enough to grant authority doesn't need to.

Two kinds of POA — and they're not the same document

Financial / general power of attorney. Lets your agent handle banking, real estate, taxes, contracts, government benefits — basically anything that involves your money or property.

Healthcare power of attorney (sometimes called a "healthcare proxy" or part of an advance directive). Lets your agent make medical decisions for you when you can't. This article is about the financial version; the healthcare one is a different document.

You usually want both, naming the same person or different people, and they're typically signed at the same sitting.

"Durable" — the most important word

Without "durable" language, a power of attorney ends the moment you become incapacitated — exactly when you most need it. The agent can pay your bills while you're on a business trip, but not while you're in a coma.

A durable POA stays in force through incapacity. Almost every POA you'd actually sign should be durable. It's the default in modern templates, but worth confirming explicitly.

Springing vs immediate

A springing POA only "springs" into effect when you're incapacitated, typically defined as two doctors' letters confirming inability to manage affairs. The advantage: nothing happens while you're competent. The disadvantage: defining the springing trigger adds friction at the worst moment, and banks sometimes balk at honoring a springing POA without seeing the doctors' letters.

An immediate POA is in effect from the moment you sign. Your agent can use it the next day. The advantage: zero friction. The disadvantage: you've handed over authority while you're still fully competent — there's a trust burden.

For most people, the right answer is an immediate POA with a trusted agent. The "what if they misuse it" worry is real but lower than the "what if I'm incapacitated and no one can sign for me" risk. Banks honor an immediate POA without question once they've seen it; springing POAs invite questions.

If you do choose springing, name a backup who can confirm the triggers easily.

What the agent can do

A general POA grants broad authority. Specific powers usually itemized:

• Banking — open and close accounts, deposit and withdraw, sign checks
• Real estate — buy, sell, mortgage, lease
• Tax matters — file returns, pay taxes, communicate with the IRS
• Insurance — purchase, cancel, file claims
• Retirement accounts — withdraw, roll over (within plan rules)
• Government benefits — Social Security, Medicare, Medicaid
• Operate businesses
• Engage attorneys and accountants on your behalf
• Make gifts within limits (often $18k/year — the annual gift exclusion)

A POA does NOT give the agent the right to:

• Make a will for you (only you can sign that)
• Vote on your behalf
• Make medical decisions (that's the healthcare POA)
• Get married or divorced for you

Choosing your agent

A few things to think about:

Trustworthiness. This is the highest-stakes choice in your estate plan. The agent has access to all your money. Pick someone you'd trust with your wallet and your future.

Capacity for paperwork. Banks, the IRS, real estate transactions — there's a lot of administrative work. The agent doesn't need to be a CPA, but they shouldn't be allergic to paperwork.

Geographic accessibility. Local helps — banks and notaries occasionally need an in-person agent. Not required but easier.

Always name an alternate. Same logic as for executor: your first choice may not be available. Name a backup.

How agents are protected

Acting as an agent has personal-liability risk. To protect themselves, agents should:

1. Keep meticulous records of every transaction.
2. Never commingle funds (no using your money for their own purposes, even temporarily).
3. Sign documents as "Agent for [Your Name]" — never just their own name.
4. Get advice from an estate attorney for unusual decisions.

How banks treat POAs

Some banks have their own POA forms and prefer them. They'll usually accept a properly drafted general POA, but expect:

• A request to verify the agent's identity
• A request to see the original POA document (not a copy)
• Sometimes a 30-90 day delay while the bank's legal team reviews
• Occasional pushback, especially with springing POAs

For accounts where you anticipate using the POA most (your primary checking), it's worth visiting the bank with the agent and the POA, getting it on file, and confirming they'll honor it. That avoids friction at the moment of need.

How to revoke

Revoking a POA requires a written revocation, signed and notarized, delivered to the agent and to anyone who's been relying on the POA (banks, etc.). The original POA document should be retrieved and destroyed where possible.

A new POA implicitly revokes the prior one if it says so. Most modern POAs include language: "This power of attorney revokes any prior power of attorney."

When you don't have a POA

If you become incapacitated without a POA, your family must petition the court for a conservatorship — a slow (3-12 months), expensive ($5-15k+), public process where a judge appoints someone to manage your affairs. The court-appointed conservator may not be the person you would have chosen, and the process leaves a public record.

A 30-minute durable POA prevents all of that.

What to do this week

If you don't have a POA:

1. Decide on an agent and an alternate.
2. Talk to both before naming.
3. Sign a durable financial POA (Trustwise will offer this when the product ships in your state — check the roadmap).
4. Do the healthcare directive at the same sitting; it's a separate document but the conversation overlaps.
5. Keep the original somewhere accessible to the agent (not a safe deposit box only the deceased can open).

It's the single most useful document for the case where you're alive but can't act. The will is for after you die. The POA is for the longer, harder middle.