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What is a Power of Attorney?

Fountain pen on Power of Attorney document

A power of attorney is one of the most important legal documents you can put together. Here we will review what a power of attorney is, and why it is so important.

What “Power of Attorney” Means

A power of attorney (often called POA) is a legal document. It gives someone the legal power necessary to act for another person. In a power of attorney, there is a principal and an agent

  • Principal: The principal is the person who owns the power of attorney and is granting power to the other person.

  • Agent: The is the person who has the power to make decisions on the principal’s behalf.

The agent’s power can extend to a number of different things:

  • They can make decisions on what to do with the principal’s property.

  • The principal’s finances are now under the control of the agent.

  • Medical care decisions can be made by the agent.

 Although it should be taken very seriously, a power of attorney can be useful in the event the principal is not able to make their own decisions. It is often used in cases where the principal has a serious illness or disability. It’s also common in situations where the principal isn’t able to attend something in person to sign a legal document.

Now that we’ve outlined what a POA is, let’s discuss why it’s so important.

What is Included in a Power of Attorney?

For a POA to be valid, there are several aspects that need to be present.

First, the appointment of a POA needs to be in writing. A verbal POA is considered weak in comparison to one that’s been documented on paper. The written document should be crystal clear on what is and isn’t included in the agent’s power. The power of attorney can’t be vague - it needs to outline each power. For example, if the principal is granting the power to make medical care decisions, that needs to be referenced. If the ability to make financial decisions is also to be provided, that should be spelled out in addition to the medical care power.

Second, the POA needs to be in an acceptable form for your state. Every state is different and accepts different formats. It’s important to contact an attorney to go over what your state’s requirements are.

Finally, we recommend recording the power of attorney. It’s not required but it’s standard practice in our industry.

How Does a Power of Attorney End?

There are a few situations that can cause the agent to lose their power.

  • The principal may revoke the POA

  • If the agent is the principal’s spouse and they get divorced, the POA no longer applies

  • When the principal passes away

  • Courts may determine the POA is invalid

  • An agent may not be able to do the duties anymore


Do you have any questions about a power of attorney? If so, give us a call at (714)-663-8000. We'd love to help.


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