{"id":287042,"date":"2025-04-08T12:05:15","date_gmt":"2025-04-08T17:05:15","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/estate\/planning-an-estate\/why-do-i-need-a-financial-power-of-attorney-or-health-care-direc.html"},"modified":"2025-04-08T12:17:30","modified_gmt":"2025-04-08T17:17:30","slug":"why-do-i-need-a-financial-power-of-attorney-or-health-care-direc","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/why-do-i-need-a-financial-power-of-attorney-or-health-care-direc.html","title":{"rendered":"Why Do I Need a Financial Power of Attorney or Health Care Directive\/Living Will?\u200b"},"content":{"rendered":"\n
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Why Do I Need a Financial Power of Attorney or Health Care Directive\/Living Will?\u200b<\/h1>\n
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\n By FindLaw Staff<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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Key Takeaways<\/h2>\n

A financial power of attorney (POA) is a legal document that appoints someone to manage your financial decisions if you become incapacitated. Similarly, a health care directive, often combined with a living will, designates an agent to make medical decisions on your behalf if you can’t. Without these documents, your family might face legal hurdles to manage your affairs.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n

Becoming incapacitated and unable to make your own decisions isn’t likely something you think about on a day-to-day basis. But life can be unpredictable.<\/p>\r\n

Having a financial power of attorney (POA) and a health care directive and living will in your estate plan gives you the peace of mind that comes from knowing you’re prepared in the event tragedy strikes and you’re no longer able to make your own health care decisions or financial decisions.<\/p>\r\n

What Is a Financial Power of Attorney?<\/h2>\r\n

A financial power of attorney is a legal document that gives someone \u2014 your agent or attorney-in-fact \u2014 the right to make financial decisions on your behalf. Don’t be misled by the term attorney-in-fact. Your representative does not need to be a lawyer.<\/p>\r\n

While you must draft your power of attorney in accordance with your state’s laws, financial powers of attorney are flexible documents that you can customize to your specific financial needs.<\/p>\r\n

Your Agent’s Authority in a Financial Power of Attorney<\/h2>\r\n

In a financial power of attorney, the agent you appoint has the authority to handle your financial affairs. Depending on how you draft the document, this authority might begin immediately, or it might not be conferred on your agent until you become incapacitated and can no longer make your own financial decisions.<\/p>\r\n

Scope of Financial Matters in a Financial Power of Attorney<\/h2>\r\n

You can also specify what financial matters or transactions your agent has the authority to handle. For example, you may want your agent to have the authority to act on your behalf on tax matters only or perhaps to handle your real estate transactions. Or you might grant your agent the authority to act on all your financial transactions.<\/p>\r\n

You can even authorize your agent to act on a single transaction (for example, if you’re purchasing property but will be out of the country when the transaction closes).<\/p>\r\n

Why You Need a Financial Power of Attorney<\/h2>\r\n

Your financial life doesn’t stop just because you become incapacitated. That’s why a financial power of attorney is important. Under a financial power of attorney, your agent has the authority to manage the financial transactions specified in the document. This could mean having a broad authority to handle most or all of your financial decisions, or it could be limited to making important decisions about specific financial matters.<\/p>\r\n

How a Financial Power of Attorney Helps You<\/h2>\r\n

Depending on the authority they’re given under your financial power of attorney, your agent keeps your financial affairs in order, providing for you and your loved ones. <\/p>\r\n

Your agent might handle financial matters such as:<\/b><\/p>\r\n