What Is a Power of Attorney and Why You Need One

A power of attorney (POA) is one of the least glamorous documents in estate planning, and one of the most important — it's not about what happens to your assets after you die, it's about who can act for you while you're alive but unable to act for yourself, after an accident, a stroke, or advancing illness.

The Different Types of Power of Attorney

• Durable financial POA: lets your named agent manage bank accounts, pay bills, file taxes, and handle investments — remains valid even after you become incapacitated
• Medical/healthcare POA: lets your agent make medical decisions on your behalf when you can't communicate them yourself
• Limited (or special) POA: grants authority for a specific task or time period, like managing a single real estate closing while you're out of the country
• Springing POA: only takes effect once a specific condition is met, usually a doctor certifying incapacity — sounds appealing but can cause delays exactly when speed matters most

What Happens Without One

If you become incapacitated without a POA in place, your family typically cannot access your accounts, pay your mortgage, or make medical decisions on your behalf without going to court for a conservatorship or guardianship. That process is public, can take months, costs thousands of dollars in legal fees, and requires ongoing court supervision — all of which a POA signed in advance avoids entirely.

Durable vs. Non-Durable

A non-durable POA automatically ends if you become incapacitated — which defeats the purpose for most estate planning use cases. A durable POA explicitly states that it remains in effect if you become incapacitated, which is almost always the version you want as part of a personal financial plan.

How to Set One Up

An estate planning attorney will typically draft a POA for $200–$500, often bundled with a will and healthcare directive for a few hundred dollars more. State-specific online templates exist for simpler situations, but the notarization and witness requirements vary by state, so verify your document meets your state's legal requirements before relying on it.