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A power of attorney names a person who can act on the consumer’s behalf; this person is called your “agent” or “attorney-in-fact.” This status grants the POA authority to make decisions in the consumer’s best interest.

Types of powers of attorney
Specific powers of attorney limit your agent to handling only certain tasks, like paying bills or selling a house, and generally on a temporary basis.

General powers of attorney give your agent broad authority. They can step into your shoes and handle all your legal and financial affairs. These documents can end that authority at the time you become incapacitated.

Durable powers of attorney may be limited or give your agent broad authority to handle all your legal and financial affairs, but your agent keeps the authority even if you become physically or mentally incapacitated. This means that your family may not have to ask for a court to intervene if you have a medical crisis or have severe cognitive decline such as late stage dementia.

Sometimes, medical decision-making is included in a durable power of attorney for health care. This may be addressed in a separate document that is solely for health care, like a health care surrogate designation. Some states recognize “springing” durable powers of attorney, which means the agent can start using it only once you are incapacitated. Some states don’t, which means the day you sign the durable power of attorney, your agent can use the document.

Prepare documents early, update frequently Although a dementia diagnosis alone does not prevent a person from signing legal documents, we cannot ethically let a person sign if they are not “competent.” Basically, this means that they are not able to understand the
implications of the document.

The only recourse if a person is not competent to sign legal documents may be a court procedure known as a guardianship or conservatorship. These can be expensive, time-consuming and contested by family members who don’t agree.

Assets can be depleted quickly, and relationships strained. The biggest risk as the care recipient is that you may not have a say in who will be the person the court appoints to make decisions for you.