Do-It-Yourself Power of Attorney

By Brette Sember, J.D.

Do-It-Yourself Power of Attorney

By Brette Sember, J.D.

A power of attorney (POA) is a legal document that gives someone else the authority to handle business or financial matters on your behalf. Each state has its own laws about powers of attorney. Some states have specific forms you must use for the POA to be legally valid, while others include language in their statutes as to what a POA must include to be valid. You can create a POA yourself as long as it fulfills your state's requirements, or you can use an online service to create the document.

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Responsibilities of a POA Agent

When you create a POA, you are the principal authorizing an agent to act on your behalf. Agents are required to use reasonable care and loyalty in acting for you, using what is called fiduciary duty. Your agent cannot profit from representing you, but in some states it is legal to pay the agent a reasonable fee. You can choose anyone you like to be your agent, but the person must be a legally competent adult. It's a good idea to choose an alternate in case your agent dies before you, becomes mentally incompetent, or no longer wants to take on this responsibility.

The POA may specify exactly what types of cases or situations the agent is allowed to handle and may allow you to check specific boxes for those you wish to authorize, such as the ability to sell real estate, access bank accounts, pay bills, or manage a business. If you want your agent to be able to give gifts using your assets, you may need to include a specific rider stating so. Depending on your state laws, the POA may instead just provide blanket authority to handle all financial and business affairs.

Types of Powers of Attorney

There are a variety of powers of attorney that may be available in your state. These include:

  • Medical POA. This is essentially a healthcare proxy document and does not apply to managing financial or business matters. Instead, it authorizes your agent to make medical decisions on your behalf when you are unable to.
  • Durable POA. This POA, used for legal, financial, and business matters, becomes effective immediately upon execution and remains in effect until it is destroyed or revoked by the principal. It's important that the POA contain language stating that it is durable and ongoing. You can create a durable POA and keep it in a secure place, such as a home safe, until it's needed.
  • Springing POA. This type of POA does not become effective until the occurrence of a specific event or situation described in the document. A common springing POA includes a clause that it becomes effective when the principal becomes unable to manage their own affairs.
  • Nondurable POA. This is a temporary POA, created to be effective only for a specific period of time and expiring at a date mentioned in the document. You might, for example, create a nondurable POA so your agent can manage your affairs while you are in the hospital for a scheduled surgery or out of the country on a sailing trip.
  • Special or limited POA. This type of POA gives an agent authority to act in a one-time situation and no other. Some examples of when such a POA might be used include if you want someone to close a real estate transaction on your behalf while you are out of town.

Executing and Revoking a POA

Each state has its own laws about how a POA must be executed to be legal in that state, so be sure to check your state laws. In some states, you must sign the document before a notary. Other states require witnesses.

If you change your mind about your POA, you can revoke it at any time. To do so, destroy the original and any copies. Alternately, you can create a written revocation clearly stating you revoke all prior POAs. The revocation may need to be notarized or witnessed, depending on your state laws, and must be delivered to your agent and anyone else who received a copy.

A POA is an important estate planning tool, allowing you to ensure your financial and business affairs can be handled in the future if you are unable to attend to them yourself. Be sure to review your options to ensure you're using the correct type of POA for your particular situation.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.