A power of attorney document is a legal instrument in which a person, the “Principal,” grants a third-party, called an “Agent,” permission to manage their affairs. They are used to ensure the seamless management of assets when someone cannot otherwise manage their own affairs.
Some of the powers a power of attorney can grant to an agent include:
- Authority to buy, sell, and encumber real property;
- Authority to access bank accounts;
- Authority to access safe deposit boxes;
- Authority to access and open new credit cards;
- Authority to access digital devices, and to manage digital assets, and accounts;
- Authority to manage investments;
- Authority over partnership interests;
- Authority to manage business assets;
- Authority to collect debts from others;
- Authority to deal with government agencies regarding benefits;
- Authority to manage insurances;
- Authority to manage and access annuities;
- Authority to manage and access retirement accounts.
Power of Attorney Instruments as Protection for Incapacity
A power of attorney instrument is a central part of an estate plan because it protects individuals during periods of incapacity.
Incapacity occurs when someone can no longer express their desires when they are either unconscious or otherwise unable to manage their own affairs. For example, someone would be considered incapacitated while they are in a coma, because the individual is unable to communicate.
Using a power of attorney, an agent can prove to others that they have the authority to represent the affected person, thus allowing for the management of that person’s interests.
Through a power of attorney document, an appointed agent could pursue personal injury cases on behalf of an incapacitated person. They could also use the document to manage the assets of someone who has late-state dementia, thus granting protection to elderly individuals.
Types of Power of Attorney Documents
A good power of attorney instrument can be tailored to fit the needs of a person’s life. They can be prepared as either “General” or “Limited”, as well as “Durable” or “Springing.”
A General power of attorney document grants a third-party expansive management of all assets belonging to an individual, thus allowing a person to have wholesale protection for any type of emergency. A Limited power of attorney, in comparison, can be tailored to specific assets, or accounts, thus granting seamless management of particular assets.
A Durable power of attorney comes into power immediately upon being signed and continues until a person cancels the power. However, a Springing power of attorney document only comes into effect during defined periods of incapacity.
Power of Attorney Instruments and Guardianship Proceedings
A powerful feature of a power of attorney is that it may allow someone to avoid the need of guardianship proceedings. Judicial guardianship is the legal process where a court appoints a responsible adult to care for and manage the finances of an incapacitated individual.
Without a power of attorney instrument, if a person becomes incapacitated, it would be necessary for close friends and family to undergo the judicial guardianship process before they could intercede to protect the interests their interests. With a power of attorney instrument in place, one has already made those arrangements, thus avoiding the need for a lengthy and costly legal process.
Preparing for moments of incapacity is particularly important for individuals who possess complex investments or who manage a business. With a power of attorney instrument in place, a person can protect against loss by planning for the seamless management of their assets by someone they trust.
For further questions, schedule a consultation at Francisco@CalderonTrusts.com.
Updated October 6, 2026