A power of attorney is a legal document that lets you appoint another person to make property, financial and other legal decisions on your behalf.

Power of attorney is relevant to health care because the person you appoint to manage your finances may have an indirect but important role in determining the health care you receive. Someone with power of attorney can deal with issues of medical treatment, medical insurance and enrollment in government health benefits (such as selecting your Medicare health or drug plan).

A durable power of attorney is effective while you can still manage your own finances and allows for your agent to handle specific transactions. A durable power of attorney allows your agent to make property, financial and other legal decisions from the time that you sign it until your death or until you decide to revoke their power. A durable power of attorney is legally valid even if you become physically or mentally incapacitated.

You can appoint the same person to manage your finances and make health care decisions. To do so requires two separate documents. You must fill out the power of attorney documents and the health care proxy documents.

Rules about powers of attorney—including limitations on what an agent can or can’t do—vary from state to state. You can also set limits on your agent’s powers. With regards to your health care, you can generally give your agent the ability to:

  • Collect Medicare, Social Security and other government benefits on your behalf
  • Manage or change your health insurance policies and plans
  • Manage your funds to help you pay for medical treatments and long-term care services (such as help at home or residence at an assisted living facility).

You can also give your agent the power to:

  • Use your assets to pay your bills
  • File your taxes
  • Operate your small business
  • Conduct your banking transactions
  • Manage your investments
  • Buy, sell, and manage your property
  • Manage your retirement accounts
  • Hire someone to represent you in court

If you complete a durable power of attorney, you don’t give up the right to make decisions for yourself. However, any decision your agent makes has the same legal consequences as if you had made it yourself. You should look at the power of attorney document periodically to ensure that your agent is still the person you want to make decisions for you. If your preference changes, you can change the document.

Power of Attorney documents generally allow you to name a second person who can act as your agent if for some reason your primary agent cannot fulfill their duties. You should always name a backup agent.

Consult with a lawyer to create a power of attorney document. The document needs to be tailored to your individual needs and be drafted with precise legal language. Contact your State Bar Association for information about your state’s rules.