A power of attorney is a written appointment of one person—the attorney-in-fact—to act on your behalf. Powers of attorney are subject to the laws of the state where they are to be used. The power of attorney should be notarized.
A power of attorney may be “general” (unlimited in scope) or “limited” (confined to one or more specific functions, such as bank transactions or health-care decisions). Subject to any limitations stated in the power, the attorney-in-fact has the authority to do whatever the person granting the power could do. This may include filing income-tax returns, hiring home-health-care aides, filing insurance claims, paying bills, selling real estate, or giving gifts to children and grandchildren.
As with a personal representative, spouses, adult children, trusted friends, and financial advisors are all common choices to serve as the attorney-in-fact. But since there is no direct court supervision, extra care should be used to appoint someone worthy of great trust.
A power of attorney may be revoked in writing by the person granting it, and it expires when that person dies.