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Power of Attorney: What You Need to Know

Updated: Apr 15, 2022

This is most probably not the first time you have chanced upon the words ‘power of attorney.’ I myself heard of the phrase quite a number of times even before becoming a lawyer, but it is only once I actually ventured into the field of law and, eventually, estate planning, that I was able to truly appreciate its value especially in decision making, managing properties, preparing for the future… Yes, it’s THAT important, folks!

In fact, it plays such an important role in estate planning that I have already touched upon the subject a while back, such as in the three-part Pandemic Planning series, (this one discusses the medical power of attorney in incapacity planning!).

Today, it’s all about POA. What is it exactly? Why does it play a huge role in estate planning?

Why should it interest you, as someone who is looking to prepare for what lies ahead?

Let’s answer these questions one by one!


What is a Power of Attorney (POA)?

Let’s start off by discussing one of the most common misconceptions about a POA. Most people think (and it is not surprising, really) that a power of attorney is a kind of authority granted to, literally, an attorney/lawyer.

Well, this is not entirely false, but it is not entirely true either. A POA is, indeed, an authority granted to another person, but this person does not necessarily have to be a lawyer. Save for a few restrictions like the age requirement, a POA can be granted to anyone that the principal (that is, the person giving the power or authority) has trust and faith in.

Trust and faith… Why do these even matter, you say?

In simple terms, when a person grants a POA to another, he is authorizing the person to act on his behalf. The power can be for the signing of documents, buying or selling properties, making decisions in financial or health matters—for any purpose, really! In a sense, the person granted the POA is like an extension of the personality of the principal. He is literally an agent, and the actions and decisions he makes are considered as if made by the principal himself, so… Yup! Trust and faith are definitely important in this whole POA thing.

What are the kinds of POA?

Now, I don’t want to tire you with all the many specific kinds of POA… I’ll save that for later! For now, what’s good to know is that there are two major POA classifications: specific and general power of attorney.

  • A specific POA is one where the agent has only limited or specific powers—only those that are particularly stated in the POA document.

  • A general POA is the exact opposite. The agent in a general POA enjoys broad powers, and can act on behalf of the principal for almost any business or affair. A powerful personality, indeed!

I know I just said a few paragraphs ago that I wouldn’t be talking about many kinds, but indulge me—there’s just one other kind that you need to know about, too. It’s the durable POA, which I’m sure some of you have already encountered even before reading this blog.

Basically, what you need to know about a durable POA is that it endures even after the principal has become incapacitated (or is unable to think, speak, or decide for himself, usually due to health reasons). This is exactly where it gets its ‘durability.’ You have to note, though, that this kind of POA does not extend to making decisions related to the principal’s health—you need a different POA for that!

If the POA does NOT carry on and ceases as soon as the principal becomes incapacitated, what’s it called? You guessed it—it’s the non-durable POA.

Ok, ok… I’ll stop it with the kinds of POA for real now! (Let’s continue this in a separate blog post, shall we?)

What are the requirements for a POA?

Of course, apart from the powers of the agent, as well as the kind of POA agreed upon by the parties, there are some other things that the POA document must contain. The requirements differ from state to state, but here are the usual, common ones:

  • Identities of the principal and the agent

  • Signature of the principal (which proves his permission to being represented by the agent named in the document)

  • Date of execution (that is, the date when the POA becomes effective)

  • Duration of the POA

  • Powers or acts the agent is allowed to do on behalf of the principal

  • Other state requirements such as notary’s seal and signature, durability, etc.

What is the importance of a POA in estate planning?

After learning about the POA basics from the earlier portions of this blog post, I’m pretty sure you can already guess the big role of a POA in estate planning.

In essence, a POA is a safety net. In the event that you become unable to do things on your own, you have someone whom you trust (and have already instructed and prepared, presumably) to continue your affairs for you. You have someone who will properly manage and take care of your hard-earned money and properties, instead of them being misused, abused, and handled poorly. You wouldn’t want this, of course. More than anyone, it is your family and loved ones who should benefit from the assets you have worked so hard for. A POA, effectively, makes sure of that.


There you have it! If you want to learn more about the concept of a power of attorney or any other related topics, sign up for a virtual consultation here. No worries—this consultation is casual, no-pressure, and absolutely free!

You can also contact me by clicking this link. I look forward to answering your questions and sharing my knowledge with you!

Bye for now, and talk to you again on the next post!


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