As parents age, managing financial, legal, and healthcare decisions can sometimes become more challenging—whether due to changes in health, memory, or simply the complexity of these tasks. In these situations, having a plan in place to support them can offer peace of mind for everyone involved.
One important tool that can help is a power of attorney (POA)—a legal document that allows someone your loved one trusts to step in and assist with important decisions when needed. A POA can cover a wide range of responsibilities, from paying bills and managing bank accounts to making healthcare choices or handling legal matters.
But understanding how power of attorney works (and when it’s needed) can feel overwhelming, especially if you’re unfamiliar with the legal process.
This guide will provide an overview of a power of attorney, why it’s essential, and how to set one up. By the end of this guide, you’ll better understand how power of attorney works and how it can benefit your older parents.
What Is Power Of Attorney?

One can appoint another person to handle their financial and legal affairs on their behalf by drafting a power of attorney (POA). The POA authorizes the designated person, as an agent, to make decisions and conduct transactions in the best interests of the individual who granted them the authority.
The purpose of a POA is to provide older adults with an agent who can act on their behalf when they are unavailable, incapacitated, or unable to make decisions due to health problems.
There are different kinds of POAs, and the rules governing them can differ from state to state. The five most common types of POAs include:
1. General Power of Attorney
This type of POA gives the agent a broad range of power to act on behalf of the older adults for most legal and financial matters, such as signing documents, paying bills, or selling property. However, the general POA is not considered “durable” and ends once the older adult becomes mentally incapacitated.
2. Durable Power of Attorney
Unlike the general POA, a durable POA remains in effect regardless of older adults’ physical or mental condition, including during a coma or other event that makes them unable to communicate.
3. Medical Power of Attorney
This type of POA goes into effect only when an older adult is legally incapacitated. The agent has the legal authority to make decisions about the older person’s healthcare on their behalf, such as consenting to procedures or selecting a care facility.
4. Limited Power of Attorney
A limited POA grants the agent a limited amount of power, with specific limitations determined by the older person. It could include giving an agent control over a single action, such as buying or selling stock or a particular category of transactions or responsibilities.
5. Springing Power of Attorney
A “springing power of attorney” is a type of advance directive that doesn’t take effect until the older person has been deemed legally incapable of making decisions for themselves. For older adults who value their independence, a “springing power of attorney” may be the best option. But, there may be issues and setbacks in the future with this choice.
Getting a medical opinion on the matter of competency can be time-consuming and expensive, not to mention fraught with potential legal complications.
Why Does An Older Person Need A Power Of Attorney?

As our loved ones age, having conversations about their legal and financial affairs is vital. One crucial legal document they might require is a power of attorney (POA).
An older person can designate another person or themselves to handle specific business and legal matters on their behalf by executing a power of attorney. Here are some of the common reasons why an aging adult may need a power of attorney:
1. Financial Difficulties
Sometimes, managing finances becomes more challenging with age—whether due to difficulty keeping up with bills, organizing paperwork, or navigating complex decisions. A financial power of attorney allows a trusted person to help handle these tasks and ensure important matters are taken care of.
2. Chronic Illness
When someone is living with a chronic or life-threatening illness, they may need extra support managing healthcare decisions or financial matters, especially during treatment. Having a power of attorney in place ensures that a trusted person can step in to help, whether for managing medical care, paying bills, or handling day-to-day responsibilities.
3. Memory Impairment
Memory impairment, such as Alzheimer’s disease or other types of dementia, can make it hard for someone to manage their finances or make informed decisions. Establishing a power of attorney early—while your loved one can still fully understand and sign the paperwork—helps ensure their wishes are honored and important matters are managed smoothly.
4. Upcoming Surgery
If an aging adult is preparing for surgery or facing a period of recovery, having a medical power of attorney (or healthcare proxy) allows a trusted person to make healthcare decisions on their behalf if they’re unable to do so. A financial POA can also ensure their bills and financial obligations are handled during this time.
5. Regular Travel
For older adults who travel frequently or spend extended time away from home, having a power of attorney in place can provide peace of mind. It allows a trusted person to manage financial matters—like paying bills or handling bank accounts—while they are away, ensuring nothing falls through the cracks.
When Does Power Of Attorney End?

A power of attorney (POA) is an important legal document that allows someone you trust to help manage financial, legal, or medical decisions if you’re unable to do so yourself. But a POA doesn’t last forever—it comes with limits on when and how it can be used.
Here are the common reasons a power of attorney may end:
1. Expiration
In some cases, a POA is set up with a specific end date written into the paperwork. If the document includes this, the agent’s authority will automatically end on that date, even if the person who created it (called the principal) is still living and capable.
2. Revocation By The Principal
As long as the principal still has the mental capacity to make decisions, they can revoke (cancel) a power of attorney at any time, for any reason.
To fully revoke a POA:
- Put the revocation in writing.
- Notify the agent (the person named in the POA).
- Send the revocation to any banks, healthcare providers, or institutions that were given the original POA.
Sometimes it may be helpful to work with an elder law or estate planning attorney to ensure the revocation is handled properly and that all parties are notified.
3. Death Of The Principal
A power of attorney automatically ends when the principal passes away. After death, responsibility for managing the person’s estate shifts to the executor named in their will (or the court-appointed administrator if there is no will).
4. Incapacity
The ability of the agent to act may also end if the principal becomes mentally incapacitated—unless the POA is specifically written as a durable power of attorney.
- A durable power of attorney stays in place even if the principal loses capacity (for example, due to dementia or serious illness).
- A non-durable power of attorney ends if the person becomes unable to make their own decisions.
Be sure to check how the document is worded, as this makes a big difference in whether the agent can continue to act.
5. Fulfillment of Purpose
If the POA was created for a specific task—such as handling a real estate sale or managing one particular business transaction—the agent’s authority ends once that task is completed.
Revoking A Power Of Attorney
There are many reasons someone might decide to revoke a power of attorney—perhaps the person named as agent is no longer available, or the principal’s preferences have changed. As long as the principal still has mental capacity, they can revoke a POA at any time.
To revoke a POA:
- Put the revocation in writing.
- Notify the agent directly.
- Notify any banks, healthcare providers, or financial institutions that have a copy of the old POA.
- Consider sending the revocation by certified mail to ensure proof of delivery.
If you’re creating a new power of attorney, it’s often recommended to include a clear statement that any previous POAs are now revoked.
Because laws can vary by state, working with an attorney experienced in elder law or estate planning can help ensure everything is done properly.
Who Can Override A Power Of Attorney?
The principal—the person who created the POA—remains in charge as long as they have the capacity to make decisions. They can change or cancel the POA at any time. However, if there is concern about misuse or abuse of power by an agent, family members may be able to ask the court to step in and remove that agent.
Keep in mind, the rules about powers of attorney can vary by state. While many states follow the Uniform Power of Attorney Act, not all do. An attorney who understands your state’s laws can provide guidance that’s specific to your situation.
Summary
Putting a power of attorney in place is one of the most important steps in planning ahead—especially when caring for aging parents or loved ones. It allows you to respect their wishes and provide the right support if and when it’s needed.
Remember:
- Review and update POA documents regularly.
- Make sure the right person is chosen as agent—someone trustworthy and capable.
- Work with a professional if you’re unsure about how to set up, update, or revoke a POA.
With thoughtful planning, a power of attorney can bring peace of mind to everyone involved.