Definition
A legal document naming someone to act on your behalf, financially or medically, if you cannot. A durable financial POA stays valid through incapacity, which is exactly when it is needed.
Why it matters
Without a POA, a spouse or adult child cannot pay your bills, manage accounts, or make decisions if you are incapacitated; the alternative is a court-appointed guardianship, slow and public, during a crisis. It is the cheapest document in an estate plan and the one most often missing.
Example
After a parent's stroke, an adult child with a durable financial POA keeps the mortgage and utilities paid from the parent's accounts the same week. A neighbor in the same situation without one spends months and legal fees obtaining guardianship before touching a single bill.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.