What is a financial power of attorney?

A power of attorney is a document that authorizes an individual, called the Agent, to act on behalf of another (the Principal).  It can be drafted to give the agent broad discretion or very limited, specific powers.  The major benefit of this document is that it allows the Principal to choose who will act on their behalf in case they become incapacitated, and helps avoid costly guardianship proceedings.  Generally, a power of attorney is either immediately effective or a “springing” power, which becomes effective only upon the incapacity of the Principal.