A power of attorney is a tool frequently used in estate planning. It provides legal permission for someone to act on behalf of another person. There are various types of powers of attorney, and several have specific roles for use in estate planning. It’s valuable to understand the different types to know the pros and cons of each, especially around a durable power of attorney, which can be more restrictive, and yet somewhat safer in some instances than other powers of attorney.

How Does a Power of Attorney Work?

Two parties are involved in a power of attorney: The principal, the person assigning the permission, and the agent or attorney-in-fact (we’ll use the term agent going forward). Once signed, the agent has the legal right to handle legal and financial matters for the principal if the principal becomes temporarily or permanently unable to manage their affairs.

Usually, a power of attorney will remain in effect until the principal passes away. There are some exceptions to that, including the principal revoking the power of attorney, a court invalidating it, the agent becoming unable to manage the responsibilities, or, in the case of spouses acting as powers of attorney for each other, they divorce and find a different agent.

What Are the Different Types of Powers of Attorney?

There are two main types of powers of attorney, and some people may use both depending on their circumstances and the complexity of their estate.

  • Financial. This type of power of attorney allows the agent to handle financial or business matters for the principal. The principal can give broad permission for many situations, or they can be narrowly focused. One example would be someone selling a piece of real estate in another state and authorizing a power of attorney to handle just that transaction in the principal’s absence.
  • Medical. This allows the agent to make medical decisions on the principal’s behalf. The principal can specify what types of medical treatments they do or don’t want to receive if they’ve been incapacitated, such as feeding tubes, breathing tubes, etc.

How Are Powers of Attorney Activated?

There are three ways powers of attorney are activated, and this is where the concept of the durable power of attorney comes in.

  • Durable power of attorney. This can be done both for financial and healthcare reasons. With a durable power of attorney, the agent is authorized to act on the principal’s behalf once the principal signs it. The agent retains that authority whether or not the principal ever becomes incapacitated. It remains in effect until the principal revokes it or passes away.
  • Non-durable power of attorney. Just as it sounds, this type of power of attorney is the opposite of a durable power of attorney. It goes into effect once it’s signed, but the agent loses authority either when the specific task is completed (see the real estate transaction example mentioned above) or when the principal becomes incapacitated.
  • Springing power of attorney. This is similar in authority to the durable power of attorney, but it doesn’t activate until the principal becomes incapacitated. These can be complicated by how incapacitation is defined, which can slow it down from becoming active.

What Are the Pros and Cons of a Durable Power of Attorney?

A durable power of attorney has some strong advantages as an estate planning tool, but it shouldn’t be undertaken lightly. Here are some considerations to keep in mind.


  • The durable power of attorney can be relatively simple and inexpensive to set up and maintain, plus it protects the estate from expensive court proceedings if the principal becomes incapacitated without one. In addition, the principal could end up having a conservatorship established by the court that would not necessarily have any idea what the principal wants.
  • This type of power of attorney can be very specific about what is and isn’t authorized and when the agent is allowed to begin handling responsibilities.
  • The agent can also formally be required to keep detailed records of everything they do for the principal, with those records available to the principal anytime they ask. 
  • The principal has the right to revoke the power of attorney.
  • This is a confidential legal document which does not have to be disclosed to anyone but the involved parties.


  • This type of power of attorney ends with the principal’s death. It cannot be used to settle an estate. For that, wills or trusts (or both) need to be created. If someone dies without a will, the agent on the power of attorney has no authority to settle the estate and distribute the assets.
  • There is no court oversight of these. That means if the agent is dishonest, they’ll have no court monitoring what they’re doing. 
  • The principal must be deemed competent when they sign the durable power of attorney. If they’ve become incapacitated, it’s too late. 
  • If the principal revokes the durable power of attorney, they must contact all third parties that are affected.

What Should I Consider When Choosing an Agent for My Durable Power of Attorney?

One of the most important aspects of assigning an agent for a durable power of attorney is how trustworthy and reliable they are. Often the durable power of attorney is someone’s spouse, but there are cases where that may not be a good idea. With a financial power of attorney, the principal’s assets and estate are at stake, while with a medical power of attorney, the principal’s life and end-of-life wishes are at stake.

It’s also important that the agent be competent and able to handle the responsibilities. Many people select someone who’s not a family member, such as an attorney or accountant whose familiar with both the estate and the legal requirements of the power of attorney.

What Do I Need to Do to Set Up a Durable Power of Attorney?

Call us at 601-353-8504 for a no-obligation case evaluation. We have considerable experience with estate planning and all types of powers of attorney and can help you sort through what would best represent your interests and estate.