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A Beginner’s Guide to Power of Attorney for Elderly Parents

22 minute readLast updated May 2, 2023
Written by Melissa Bean, senior living writer
Reviewed by Denise Lettau, J.D., wealth management specialistAttorney Denise Lettau has over 15 years of experience in the wealth management industry.
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As a parent or relative ages, it can become a struggle to balance respect for their autonomy and independence with protecting them from negative consequences of mental or physical health problems. A power of attorney, or POA, is one way to help ensure that no matter what happens down the road, your loved one’s wishes will be prioritized. A power of attorney is one of the most important documents for elderly parents, but it’s one that many families haven’t prepared. Fortunately, setting up a power of attorney is fairly simple, and it can save you from future complications.

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What is a power of attorney?

A power of attorney (POA) means you have written authorization to act on someone else’s behalf in certain situations, which may include legal and financial matters. A competent adult, called the “principal,” signs a document that grants a trusted individual, such as an adult child, the authority to make decisions on their behalf. The person designated to act on the principal’s behalf is called the “agent.”

Specific circumstances or limitations may apply to a power of attorney.

How does a power of attorney work? 

It’s the agent’s job to make sure they follow the direction of the power of attorney and generally act in the best interest of the principal — in this case, their aging parent.

The interpretation and implementation of powers of attorney may vary greatly between states. Fewer than 30 states have adopted the Uniform Power of Attorney Act since the latest version of the bill was proposed in 2006. State-specific questions about how power of attorney works in your state or your parent’s state may be answered by a local elder law or estate planning attorney.

What are the different types of power of attorney?

There are many different forms of POA depending on the unique medical or financial needs of the principal. For elderly parents and their adult children, the most commonly used types of POA can be broken down into two subcategories:

  • General POA versus limited POA
  • Springing POA versus durable POA

General POA vs. limited POA

A general power of attorney gives a senior’s agent power to act on their behalf on a variety of matters. It can be used to help care for parents who want help managing their affairs as they advance in age.

Examples of the actions that an agent with a general POA may take include:

  • Signing documents on the principal’s behalf
  • Opening or closing bank accounts and withdrawing funds
  • Buying and selling property, real estate, and assets
  • Trading and selling stock
  • Paying bills and cashing checks on the principal’s behalf
  • Entering contracts for utilities and services, such as housekeeping or home health care

A limited power of attorney means a senior can give someone agency for a limited amount of time over specific matters, which are generally stipulated in the document.

“For example, a mother becomes ill and wants her son to oversee the sale of her home since she now resides in a nursing home,” said Chad Holmes, a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional, a certified public accountant (CPA), and the founder of Formula Wealth, a financial planning firm. “She can grant her son permission to sign the real estate documents, but he won’t be in charge of her investments or medicine. When the situation has passed, the principal can revoke the power, thus removing the agent’s ability to act as their representative.”

Springing POA vs. durable POA

A springing power of attorney is executed in advance, but it doesn’t go into effect until a senior receives a declaration of incapacity. Seniors who want to maintain autonomy as long as possible may prefer a springing power of attorney. However, this decision could lead to many complications and delays down the road.

“This type is generally frowned upon in professional circles because it is not easy to verify the principal is incapacitated,” Holmes said. “For example, instead of being able to act as soon as the need arises, the agent must get a ‘determination’ of [the principal’s] incapacity before ‘gaining power.’”

That process of “determination” can be costly and time-consuming, which is less than ideal in an emergency situation, and it’s often subject to legal conflicts.

Meanwhile, a durable power of attorney allows the agent to make decisions through all of the principal’s mental and physical circumstances.

“The general durable power of attorney … goes into effect immediately upon signing and stays in effect until revoked or until the principal passes away,” Holmes said. “Having the durable status means we’re not scrambling to verify power when something bad happens. Doctors don’t have to agree with an incapacity diagnosis. The agent is simply the agent through good times and bad.”

However, if a parent were to become incapacitated without having a general durable power of attorney, an adult child would likely have to go to court and have the parent declared incompetent before being able to take care of the parent’s affairs, as noted by Holmes.

Why does an aging parent need a power of attorney?

“Assuming no limitations in the power of attorney document, having a trusted person serve as your agent is crucial as you get older,” Holmes said. “Regardless of wealth, everyone can benefit from having this legal form in place as they age.”

A POA grants a chosen adult child, relative, or trusted friend the ability to make decisions when a parent or grandparent is either unwilling or unable to do so. There are a variety of reasons seniors may feel it’s time to set up a power of attorney.

“The most obvious scenario is when you become incapacitated or start to decline mentally,” Holmes said. “Having someone to make medical and financial decisions for you is so powerful. The POA can make sure your bills are paid on time, your taxes are filed, your medicine is ordered, your required minimum distributions are completed, your doctor’s notes are followed, and so much more.”

Here are some other factors related to aging that may be a reason for your loved one to create a power of attorney.

Difficulty with financial responsibilities

If your aging relative has a hard time staying on top of financial obligations or is in danger of overspending their savings, they may consider creating a power of attorney to allow an adult child to handle finances for them. An adult child who becomes an agent can check for overdue bills, duplicate checks, and fraudulent requests for funds.

Alzheimer’s disease or another dementia diagnosis

It’s vital to set up a durable power of attorney for an elderly parent who has Alzheimer’s disease or another type of dementia before they experience significant cognitive decline. It can be complicated or even impossible to execute legal documents once a senior is deemed mentally incapacitated.

Upcoming surgery

Invasive procedures, such as hip replacement surgery, can lead to complications and require extended recovery times — especially for elderly adults. A power of attorney helps ensure that a senior’s wishes will be respected in case of an emergency or in the event the senior is incapacitated.

Planned travel

Sometimes, a POA is established out of convenience rather than medical necessity. If seniors are traveling in retirement, they may want someone at home to be able to cash incoming checks, handle bills, oversee emergency home repairs, and more.

Medical diagnosis

A senior with a terminal diagnosis may want to establish a power of attorney to help ensure their wishes are met when they become incapacitated or too sick to make health care decisions on their own.

Unstable family relationships

It’s common for adult children to fight about a parent’s care, especially if they disagree about finances or end-of-life decisions. A power of attorney clearly designates who’s responsible for upholding the senior’s wishes, and it can block ill-intentioned family members from intervening.

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When is the right time to set up a power of attorney?

A senior’s wishes may not be known or respected without legal documentation, so it’s important to discuss a power of attorney with aging relatives.

Experts recommend establishing a power of attorney for an elderly parent before they need it — especially if they’ve received a concerning diagnosis. Patients diagnosed with early-stage dementia should consider setting up a power of attorney before the disease progresses.

If an aging relative is determined no longer competent to make their own decisions and doesn’t have a POA, family members face a complicated, expensive legal process to set up a conservatorship or guardianship. This is also when the difference between a general power of attorney and limited power of attorney becomes critical.

How do I set up a power of attorney for an elderly parent?

Here are the basic steps for setting up a power of attorney for a parent:

  1. Your parent decides that they need a power of attorney document to name an agent to handle their affairs in certain circumstances.
  2. Your parent creates the power of attorney document.
  3. Your parent names you, their adult child, as their agent in the document.
  4. Your parent signs the document to execute it. (Some states may require that the document is notarized and has at least one witness.)
  5. You, as the adult child and the agent, will likely need copies of the power of attorney to act on your parent’s behalf.

In the past, it may have been necessary to go through an attorney to draft a POA document. However, today’s technology allows your parent to potentially use their laptop, the internet, and a website, such as trustandwill.com, to make a simple power of attorney form, as described by Holmes.

If your situation is more complex, your parent prefers not to use computers, or they want the personalized guidance of an in-person expert, a visit to a local attorney may be another course of action to consider.

The National Academy of Elder Law Attorney’s Find a Lawyer tool can help you find a local professional to assist with a power of attorney. Requirements for power of attorney may differ between states. A local estate planning attorney or elder law attorney can help ensure that the POA is executed properly.

Can I make my parent create a power of attorney?

No, you cannot. Keep in mind that it’s always important to respect your parent’s autonomy and free will. It’s OK to encourage your parent to consider creating a power of attorney and explain how it may benefit them. However, they ultimately have to decide what is right for themselves and decide when they feel it’s the right time to create a POA document.

Does my parent need to be mentally competent to sign a power of attorney?

Yes — only mentally competent individuals can sign a power of attorney document.

As noted earlier, if a person is mentally incompetent or otherwise incapacitated and doesn’t already have a POA in place, family members must go through a complicated legal process to set up a conservatorship or guardianship. This is why it’s important to suggest that your parent think about developing a power of attorney as part of their estate documents before they need an agent to help them with their affairs.

How should a parent select an agent for their power of attorney?

Your parent should choose someone they trust and who will comply with their wishes. However, choosing an agent is often one of the most challenging and difficult parts for an aging parent when creating a power of attorney. There are many questions to consider.

Is a family member the best choice for a POA agent?

Many seniors tend to select a relative, such as an adult child, as their agent by default. This is often a safe option, but it may not be the best choice if family relationships are already strained. An advisor, close friend, or professional proxy can all be safe alternatives.

Is there a knowledgeable option for a POA agent?

Someone familiar with medical procedures and treatments may be able to make better decisions as an agent under a medical power of attorney. Someone with experience in accounting may be able to make better decisions under a financial or general power of attorney.

Should power of attorney be split?

A senior can choose one agent for general POA and another for medical POA, or they can choose multiple agents for both. However, if multiple agents disagree, important decisions could be delayed.

Will the POA agent be able to carry out the parent’s wishes?

The top responsibility of an agent is to comply with the principal’s directives, but sometimes this is emotionally difficult. For example, an adult child may struggle with making the decision to end life support, even if it’s what their parent expressly wanted.

How can the risks of having a POA agent be reduced?

As with almost anything in life, there may be known and unknown risks with having a power of attorney created. It’s best to speak with a legal or financial expert to explore all of the risks related to your parent’s unique situation.

One such risk could be that an unscrupulous agent may make decisions that aren’t in your parent’s best interest. An agent should always put the needs and well-being of the principal first, no matter their own circumstances. Trust and integrity are imperative when you’re selecting an agent.

What happens if my parent selects me as their POA agent?

Being named as the agent means you’re much more than just your parent’s child now. By law, the agent under a power of attorney has an overriding obligation, commonly known as a “fiduciary obligation,” to make financial decisions that are in the best interests of the principal, or in this case, your parent.

Parents may be hesitant to set up a power of attorney because they’re worried that an agent will mismanage their affairs and assets, but a POA doesn’t grant an agent full financial rights regarding assets. Legally, an agent shouldn’t do something that isn’t in the principal’s best interest.

“Based on fiduciary obligations, just because it says you have the power doesn’t mean you have the right,” said Stuart Furman, elder law expert and author of The ElderCare Ready Book.

It’s important to note that, as an agent, you can’t typically change your parent’s will or make decisions on anything once they’ve passed away.

How does being a POA agent help me as my parent’s caregiver?

“The POA helps the adult child immensely by giving them the authority to make decisions for their parents. … By having this power, they can make decisions they believe to be in their parents’ best interest,” Holmes said. “Without that power in place, there’s no proof that they’re even a family member, much less someone with authority to make decisions.”

Having the appropriate estate documents on hand, such as the power of attorney paperwork, can make it easier to support your parent, especially if they become mentally incompetent or incapacitated. It’s also a good idea for the adult child who is acting as the POA agent to have read the documents in advance, so that they fully understand the rights they do — and don’t — have.

In addition, as your parent’s agent, you may be able to use the power of attorney to reduce taxes on generational wealth transfer and potentially avoid probate after your parent’s passing, as noted by Holmes. This can potentially save time and money for your family. Adult children should consult with an elder law attorney, an estate planning attorney, or a certified financial professional about how a POA may be used in these ways.

How do I tell my siblings I have been named our parent’s POA agent?

Sometimes, adult children can feel hurt or jealous knowing their parent has named another sibling as their agent. You know your siblings and your unique family dynamics best. If you and your parent choose to tell your siblings that you are the agent, you should be thoughtful about how you communicate this sensitive information.

family elder care planning meeting can be a good forum to discuss the power of attorney agent and help family members begin to accept the decision.

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Tense sibling relationships or strained parent-child dynamics may complicate conversations around POA decisions. Take these steps to make the process more peaceful and harmonious.

Actively listen with empathy

Take time to understand family members’ questions and concerns. Feeling heard promotes familial buy-in to the POA process. Within reason, let everyone who wants to express their thoughts and feelings participate.

Realize that strong emotions related to the aging of a parent or grandparent may cloud a person’s judgment. Try to understand a family member’s perspective and how that shapes their concerns about the POA. Refrain from criticizing or critiquing a family member during active listening.

Address concerns directly

Clear communication to address lingering questions about a power of attorney helps reassure family members and prevents future conflicts.

For example, a family member may ask, “Can [an agent] change a will? Or can a power of attorney keep family away? Can power of attorney be transferred?” If financial motivations exist, reassure family members that the agent typically cannot change the principal’s will unless the powers to amend, modify, or revoke a trust are in the POA. If visitation is a major concern, explain that access to an incapacitated parent or elderly family member likely won’t be banned as part of the POA.

Most importantly, explain that as long as the parent or elderly family member is healthy and hasn’t become incapacitated, they’re always welcome to revoke the power of attorney and craft a new power of attorney with a different agent should something change.

Some families in high-conflict situations may want to consider using a mediator or some other neutral third party to lead these discussions. Guided conversation may be more productive for these families’ needs, as a third party may be able to more effectively explain all parties’ positions.

Speak about yourself and your parent, and be respectful to family members

If your parent has chosen you as their agent, you may face questions from other relatives or friends about this situation and your decisions now or in the future. Thank your family members for their feedback, regardless of how it aligns with your chosen course of action. Allowing others to save face helps maintain positive relationships, which may prove favorable long-term.

Use this guide to explain to your loved ones how the power of attorney will function. While this is an understandably emotional topic, don’t engage in angry outbursts. Allow cooler heads to prevail, even if it takes some time. Remember that your parent chose you as their agent for a reason.

When does power of attorney end?

Typically, there are four situations that would render some powers of attorney null and void. A POA may no longer be in force if:

  • Your parent revokes it.
  • Your parent becomes mentally incompetent.
  • There’s an expiration date.
  • Your parent passes away.

However, remember that a durable power of attorney was created to allow the assigned power of attorney to remain in effect after the principal becomes mentally incompetent.

With late-in-life or “gray” divorces on the rise, you may be wondering what happens to your parents’ power of attorney if they end their marriage. In cases of divorce, a court may terminate a power of attorney that names your parent’s former spouse as their agent. It may be best to consult with a local attorney to learn more about issues pertaining to divorce and POA agents in your parents’ state.

How can my parent revoke power of attorney?

As time goes on, life circumstances may necessitate a change in the type of power of attorney or the named agent. The principal (your parent) has the power to revoke the power of attorney at any time for any reason, with no explanation needed. The exception is a durable power of attorney when the principal has become mentally incapacitated.

Your parent may choose to begin new POA paperwork through an online website, or they may start to work with an elder law attorney or estate planning attorney for expert guidance on drafting a new power of attorney and revoking an old power of attorney document. Typically, a new power of attorney states within it that any old powers of attorney are revoked.

As part of the revocation process, an attorney will likely instruct the principal to retrieve the old power of attorney paperwork from their previous agent. If this isn’t possible, the attorney may advise the principal (your parent) to send a written, certified letter via the United States Postal Service stating that the old power of attorney has been revoked.


Meet the Author
Melissa Bean, senior living writer

Melissa Bean is a former veterans content specialist at A Place for Mom, where she crafted easy-to-understand articles about VA resources, senior care payment options, dementia caregiving, and more. Melissa pairs over a decade of writing experience with her time as a military spouse, during which she organized and led a multistate military family support group.

Reviewed by

Denise Lettau, J.D., wealth management specialist

The information contained on this page is for informational purposes only and is not intended to constitute medical, legal or financial advice or create a professional relationship between A Place for Mom and the reader. Always seek the advice of your health care provider, attorney or financial advisor with respect to any particular matter, and do not act or refrain from acting on the basis of anything you have read on this site. Links to third-party websites are only for the convenience of the reader; A Place for Mom does not endorse the contents of the third-party sites.

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