← Back to Estate Planning

Power of Attorney

A legal document that grants a designated agent the authority to act on behalf of the principal in financial, legal, or healthcare matters. A durable power of attorney remains effective if the principal becomes incapacitated.

Concept Source: Beyond a Million Verified: 2026-04-07

Definition

A Power of Attorney (POA) is a legal document in which one person (the principal) grants another person (the agent, also called attorney-in-fact) the authority to act on the principal's behalf. The scope can range from a single transaction to broad authority over all financial, legal, and business matters. A "durable" power of attorney remains in effect even if the principal becomes mentally or physically incapacitated, which is what makes the document critical for estate and incapacity planning.

Without a durable power of attorney, a family member must petition the court for guardianship or conservatorship to manage an incapacitated person's affairs. Court proceedings are expensive, time-consuming, public, and restrictive.

How It Works

The principal executes a POA document specifying the agent, the scope of authority, and when the authority takes effect. Two timing structures are common:

Immediate POA: Authority is effective as soon as the document is signed. The agent can act at any time, even while the principal is fully competent.
Springing POA: Authority activates only upon a triggering event, typically a physician's certification that the principal is incapacitated. Springing POAs can create delays because the triggering condition must be verified.

Financial powers of attorney typically cover bank accounts, investment management, real estate transactions, tax filings, business operations, insurance claims, and government benefits. The principal can grant broad authority or limit the agent to specific categories.

A separate healthcare power of attorney covers medical decisions. Most comprehensive estate plans include both financial and healthcare POAs.

When Entrepreneurs Use This

Business continuity: Ensuring a trusted partner, spouse, or advisor can sign contracts, manage accounts, and make payroll if the business owner is incapacitated
Real estate transactions: Authorizing an agent to close on property purchases or sales when the principal is unavailable
Financial management during travel: Entrepreneurs who travel internationally designate agents to handle time-sensitive financial matters
Aging parents: Business owners often serve as agents for elderly parents, managing finances and healthcare decisions
Coordinated planning: The POA works alongside the revocable living trust to cover assets both inside and outside the trust

Dew Wealth Perspective

The power of attorney maps directly to the "Readiness" element of the STEWARD framework. A comprehensive estate plan fails at the moment of incapacity if no one has legal authority to act. Dew Wealth sees entrepreneurs who have sophisticated trust structures and investment plans but no POA on file. This gap can freeze business operations and personal finances at the worst possible time.

The Linchpin Partner ensures that every client has current, properly executed financial and healthcare POAs that coordinate with their trust documents. The POA should be reviewed annually, because financial institutions sometimes reject documents they consider outdated.

Frequently Asked Questions

Can I have more than one agent?

Yes. The principal can name co-agents who act together or independently, and a successor agent who steps in if the primary agent is unable to serve.

Can I revoke a power of attorney?

Yes, at any time while the principal is mentally competent. Revocation should be in writing and delivered to the agent and any institutions that have the POA on file.

Will banks and financial institutions accept my POA?

Most will, but some institutions have their own POA forms and may resist accepting outside documents. Having the POA notarized, keeping it current, and providing it proactively to financial institutions reduces friction.

Disclosure

Certain portions of this publication may contain a discussion of potential benefits and results as of a specific prior date. Due to various factors, including changing market conditions and regulations, such discussion may no longer be reflective of current potential benefits and/or results. Please remember that past performance may not be indicative of future results. Different types of investments and strategies involve varying degrees of risk, and there can be no assurance that any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Dew Wealth or any of its advisory representatives), or any non-investment-related services, will be suitable for your portfolio or individual situation, or prove successful.

The potential savings and benefits discussed represent typical results based on the experience of existing clients. Individual results can and will vary based upon a variety of factors, such as the client's investment and financial circumstances, tax bracket, current insurance policy terms and insurance needs, and overall objectives. Neither the scope nor nature of the firm's services should be construed as guarantees of a particular outcome. Dew Wealth Management, LLC ("Dew Wealth"), an SEC-registered investment adviser located in Scottsdale, Arizona, provides the Fractional Family Office services described herein. Registration is not an endorsement of the firm by securities regulators, nor is it an indication that the adviser has attained a particular level of skill or ability.

The content herein is intended to serve as informational material only and is intended exclusively for the use of the person named herein. If you are not the intended recipient, please refrain from further dissemination and return or destroy all copies of this material in your possession. This content is not representative of any particular client experience or outcome and is instead intended to provide general information regarding the potential time and money savings that could be experienced, based on various assumptions, inputs, and data sources. Among other things, the results of the calculators are derived from your inputs, and consequently, errors or omissions in entering your data into the calculator could result in materially inaccurate outputs. Dew Wealth does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party and included or relied upon herein and takes no responsibility for same. Client experiences and outcomes can and will vary from those reflected herein, and these informational outcomes should not be construed as a direct or indirect guarantee of similar future results.

Not all services will be necessary or appropriate for all clients, and the potential value and benefit of the adviser's services will vary based upon a variety of factors, such as the client's investment and financial circumstances, tax bracket, current insurance policy terms and insurance needs, and overall objectives. Clients are free to accept or reject any recommendations provided by the firm and may choose to implement accepted recommendations with the professional(s) of the client's choosing. The effectiveness and potential success of the adviser's services can depend on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client's other engaged professionals, and market conditions.

Dew Wealth Management, LLC ("Dew Wealth") is neither a law firm nor an accounting firm and does not provide legal or tax advice. Website visitors and clients should consult an attorney or tax professional regarding their specific legal or tax situation. Dew Wealth is not an insurance agency, but certain Dew Wealth representatives maintain insurance licenses in their individual capacities to allow for consultation on insurance needs and products. Neither Dew Wealth nor any individual insurance agent associated with Dew Wealth receives commission-based compensation for insurance sales. Past performance does not guarantee future results. All investing comes with risk, including the risk of loss.

By accessing, using, or receiving this Document, the Recipient acknowledges and agrees to be bound by the terms and conditions outlined at DewWealth.com/IP.