Durable Power of Attorney: What It Is and How to Set One Up for a Parent (2026)

All three types below can cover the same financial powers. What differs is when the agent can use them.

A general durable power of attorney usually lets the agent handle almost all of a parent’s financial life:

• Pay bills, rent, care fees and taxes, and deal with banks and credit card companies
• Manage investments, retirement accounts and insurance policies
• Buy, sell, lease or refinance real estate
• Apply for benefits, including Medicaid for long-term care, and gather the records the application needs
• Hire and pay caregivers, lawyers and accountants

Some acts are risky enough that the uniform act lets an agent do them only if the document expressly grants them (Utah Code § 75A-2-201). Lawyers call these the “hot powers”:

• Create, amend, revoke or end a living trust
• Make gifts
• Create or change rights of survivorship, such as a joint account
• Create or change a beneficiary designation
• Delegate the agent’s authority to someone else
• Waive the right to a joint and survivor annuity or retirement survivor benefit
• Disclaim (turn down) property, or exercise a power of appointment

For the IRS, an agent who needs to represent a parent in a tax matter usually files Form 2848 as well. Ask the tax preparer before the first deadline.

• Make medical decisions. That takes a separate durable power of attorney for health care, which names a health care proxy to make decisions if your parent can’t speak for themselves (National Institute on Aging). Many families sign both at the same appointment
• Override your parent. While your parent has capacity, they stay in charge. They can revoke the document or make their own decisions at any time
• Make or change their will. No agent can write or change a will for someone else
• Act after death. The authority ends when your parent dies. From then on, the executor named in the will (or an administrator appointed by the court) takes over
• Manage Social Security or VA payments. Social Security says a power of attorney does not give legal authority to manage a beneficiary’s Social Security or SSI payments. It appoints a representative payee instead. The VA has a similar fiduciary program for its benefits
• Benefit the agent. An agent who uses a parent’s money for their own benefit, without clear authority in the document, risks having to pay it back and, in serious cases, prosecution for financial exploitation

The steps are similar in every state, though the signing rules differ. Start while your parent is well enough to take part in the conversation.

1. 1

   Talk about it early

   The document is only valid if your parent understands what it does when they sign. With early dementia that window can still be open, but it narrows. An attorney can judge capacity at the signing, and a note from the doctor can help if it is ever challenged.

2. 2

   Choose the agent and a backup

   Pick someone organized, honest and willing to keep records, and name a successor agent in case the first can’t serve. Co-agents are possible, but requiring two signatures on everything can stall urgent payments.

3. 3

   Use your state’s form or an attorney

   Many states publish a statutory power of attorney form in their law. It is a reasonable starting point for simple finances. For Medicaid planning, a house, a business or a blended family, have an elder law attorney draft it, often alongside a health care directive and a will.

4. 4

   Decide on the special powers

   Decide whether the agent may make gifts, create or fund a trust, change beneficiaries or pay family members for care, and write each one in. Decide whether the agent may be paid. Under the uniform act an agent is entitled to reasonable compensation unless the document says otherwise.

5. 5

   Sign it the way your state requires

   Most states expect the signature to be notarized, and some also require witnesses. A signature acknowledged before a notary is presumed genuine under the uniform act, and real estate offices usually won’t record a document without it.

6. 6

   Store it and share copies

   Keep the original somewhere safe that the agent can reach. Give copies to the agent, the successor and your parent’s main bank. If the agent may sell real estate, the county may need the document recorded first.

When a parent needs nursing home care and can’t manage the paperwork, the agent under a durable power of attorney is usually the person who applies for Medicaid. That job has three parts, and the document should cover each one:

• Applying and proving finances. The state reviews five years of transfers before Medicaid pays for long-term care (the look-back period). The agent needs authority to request statements from every bank and to sign the application
• Spending down properly. Paying for care, home repairs or a prepaid funeral that meets state rules is normal spending, not a gift. Moving money to a spouse is exempt (look-back exemptions). Both need clear authority to act
• Planning moves. Gifts, trusts and caregiver agreements can change when Medicaid starts paying, and gifts inside the look-back can cause a penalty. An agent can only do these if the document grants them. A paid family caregiver needs a written agreement before payments start

If the document is silent on gifts and trusts, an agent who makes them anyway can face penalties from Medicaid and claims from other family members. That is why attorneys draft these powers deliberately, with limits, rather than leaving them out or granting them without limits.

An agent is a fiduciary: someone legally bound to act for another person, not for themselves. The Consumer Financial Protection Bureau’s guide for agents under a power of attorney sums up the duties in four rules:

• Act only in your parent’s best interest
• Manage their money and property carefully
• Keep their money and property separate from yours. Don’t put their money in your own account
• Keep good records of every payment, deposit and decision

Good records protect the agent as much as the parent. A Medicaid caseworker, a brother or sister, or a court can ask what happened to the money. A log of payments, with a receipt or invoice for each, answers that question in minutes. For cash withdrawals, repayments to family and pay for care, write down the reason on the day.

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• Your parent dies. The agent’s authority ends immediately. Bills, accounts and property then belong to the estate, which the executor handles
• Your parent revokes it, while they still have capacity, usually in writing and with notice to the agent and the bank
• The agent can’t serve and no successor is named
• Divorce or separation, if the agent is the spouse. Under the uniform act, filing for divorce, annulment or legal separation ends a spouse’s authority unless the document says otherwise
• A court appoints a guardian or conservator and limits or ends the power of attorney, which is rare

The handover at death catches many families out. An agent who keeps paying bills from a parent’s account after the death is no longer authorized to. Stop, tell the bank, and pass everything to the executor. Our checklist for when a parent dies covers what happens next, step by step.

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If your parent no longer has the capacity to sign, nobody can sign for them. The usual alternative is a guardianship or conservatorship: a court case in which a judge decides whether the person can manage their affairs and who should do it for them. It typically takes longer and costs more than a power of attorney, and it often comes with court reporting every year.

Before going to court, ask an elder law attorney whether anything simpler would work. Social Security can appoint a representative payee for benefit checks, and some accounts may already be joint or have a payable-on-death beneficiary. These help, but they don’t replace a power of attorney for a house, investments or a Medicaid application.

A simple statutory form can work for a parent with modest savings and nothing complicated. Get legal help if any of these apply:

• Nursing home care, and Medicaid, may be needed in the next few years
• There is a house, a business, rental property or a family farm
• There are children from more than one marriage, or family members who disagree
• You want the agent to be able to make gifts, create a trust or pay a family caregiver
• Your parent’s memory is already changing

The National Academy of Elder Law Attorneys has a directory of members. If money is tight, LawHelp.org lists free legal aid by state, and the Eldercare Locator (1-800-677-1116) can connect you with local legal services for older adults.