A â€œpower of attorneyâ€ is a legal document in which a person, called the â€œprincipal,â€ gives to another person, called the â€œagentâ€ or â€œattorney-in-fact,â€ the authority to make decisions for the principal. A â€œgeneralâ€ power of attorney gives broad power to the named agent to act on behalf of the principal, while a â€œlimitedâ€ power of attorney is generally used for one specific purpose. Traditionally, it is recommended that all adults who have capacity to do so, regardless of age, execute powers of attorney for finances and for healthcare, so that, if an emergency arises, they have had the opportunity to designate the individual whom they want to handle their healthcare decisions and financial issues.
By signing a power of attorney, the principal does not give up any rights. The principal may, while competent, always make his or her own decisions. In fact, a power of attorney can provide that it does not become effective unless and until the principal becomes incapacitated.