What a Power of Attorney Actually Does

Almost every difficult situation involving an incapacitated parent traces back to the same absence. There was no power of attorney, or there was one that nobody could use, and everything afterward became harder and slower than it needed to be.

What the document actually does

It appoints somebody to act. In the maker's name, in matters the document specifies, which may be broad or narrowly confined to particular transactions.

It creates authority, not obligation. The person appointed may act; the document does not compel them to, and they may decline the role entirely.

It is additive. The maker retains full authority to act for themselves, so nothing is given up by signing one while capacity remains.

It is durable if it says so. A durable power continues after the maker loses capacity, which is the whole reason most people make one.

And it covers what it covers. Authority extends only to what the document confers, so a general power and a specific one behave very differently.

What it does not do

It does not survive death. Authority ends at that moment, and everything afterward belongs to whoever administers the estate.

It does not cover healthcare. Which requires a separate instrument, discussed in the two halves of a health directive.

It does not transfer ownership. The attorney-in-fact acts in the maker's name and for the maker's benefit, never in their own right.

It does not override the maker. Who may revoke it, act contrary to it, or simply do things themselves while they retain capacity.

And it does not license self-dealing. Since the person appointed owes duties described in what an agent owes.

The powers worth including

Banking and investment. Operating accounts, dealing with institutions and managing investments, which is the core of ordinary use.

Real property. Selling, mortgaging or letting, which requires express authority in most places and is frequently omitted from short forms.

Tax matters. Filing and dealing with revenue authorities, which usually requires its own specific authorization to be accepted.

Benefit and pension administration. Dealing with the bodies that pay income, which some agencies handle under their own separate procedures.

And gifting, if intended. Which should be expressly addressed either way, since a general power is often read as excluding it.

When it takes effect

Immediately, in most cases. Which is the more usable arrangement and the one most practitioners recommend, for the reasons in immediate or springing.

Or on a defined event. A springing power, taking effect on incapacity established in the way the document specifies.

Durability is a separate question. From when it starts, and a document can be immediate and durable, which is the usual combination.

And acceptance is another. Since institutions may hesitate for reasons unconnected to the drafting, examined in why an institution refuses one.

Which is why timing matters. A document made and tested while somebody is well works; one made in a hurry during a crisis frequently does not.

Why it matters so much

The alternative is a court process. Slower, public, expensive and controlled by somebody other than the family, as set out in what is left with nothing signed.

Bills still need paying. And nobody without authority can operate an incapacitated person's accounts, however obvious the need.

Care decisions have financial elements. Deposits, agreements and applications, all of which require somebody with authority to sign.

Delay causes real harm. Mortgages fall into arrears, insurance lapses and opportunities close while a family waits for authority.

And it costs almost nothing. Which is the striking part: the document that prevents all of that is among the cheapest anybody will ever sign.

The case for making one of these is close to unanswerable. It is inexpensive, it takes nothing away while capacity remains, and its absence converts every subsequent difficulty into a court process.

The resistance older people feel is almost always based on a misunderstanding: that signing hands over control. It does not, and saying so plainly resolves the conversation more often than any amount of persuasion about prudence.

The two documents — financial and healthcare — should both exist, because they are used by different institutions in different situations, and holding one while needing the other is a familiar and avoidable frustration.

What goes in the document matters as much as having one. Real property, tax matters and gifting all need express treatment, and a short form downloaded and signed frequently omits precisely the power that turns out to be needed.

Timing matters too. A document made while somebody is well, taken to their bank and confirmed as acceptable, is a document that will work. One signed in a hospital during a crisis is frequently questioned at exactly the moment nobody can afford a delay.

And the death point deserves repeating, because it catches people who have done everything else right. Authority ends there, completely and instantly, and what follows is a different appointment altogether.

There is one further practical point that saves families a great deal of trouble. Institutions frequently want to see the original document rather than a copy, and some will insist on retaining one. Making several originals at the time of signing, rather than one, avoids the situation where an agent cannot deal with a bank because a registry is holding the only copy.

It is also worth taking the document to the main institutions while the maker is well, and asking whether they will accept it. Banks in particular have their own requirements, and discovering an objection during an ordinary week is a very different problem from discovering it in a hospital car park.

Neither of those steps takes long, and between them they turn a document that exists into a document that works. The gap between those two things is where most of the difficulty in this subject actually lives. A family that has done both can act on the day something happens, and that is the entire benefit anybody is buying when they sign one of these.