You found an overdue electric bill tucked behind a stack of magazines at your parent's house near Lanham, Maryland. Then last week, they mentioned skipping a follow-up appointment because they "couldn't remember what it was for." These small moments have a way of adding up, and eventually, they lead to a bigger question: If my parent can't handle these things on their own, who steps in?
The answer, legally, involves a document called a power of attorney (POA). But there isn't just one version. A medical power of attorney and a financial power of attorney serve two very different purposes, and understanding the distinction can save your family from confusion, delays, and even legal roadblocks during a crisis.
Let's break down what each document does, when it takes effect, and why your family may need both.
Note: This blog should not be considered legal advice and is only to be used for informational purposes. Speak with a qualified attorney about any decisions related to POAs.
A healthcare power of attorney (also called a medical power of attorney or healthcare proxy, depending on the state) gives a designated person (called an "agent") the legal authority to make medical decisions on behalf of someone else (the "principal"). This document typically comes into play when the principal is unable to communicate or make informed decisions about their own care.
The types of decisions a healthcare agent may be asked to make include:
Consenting to or declining a surgical procedure
Choosing between treatment options recommended by a doctor
Deciding whether to continue or withdraw life-sustaining treatment
Selecting a healthcare provider
Accessing medical records
One important detail: a healthcare POA generally does not give the agent authority to make decisions while the principal is still capable of deciding for themselves. In most states, it activates only when a physician determines the principal can no longer make informed medical choices.
However, the specific terms of the document matter. Some healthcare POAs are drafted to take effect immediately upon signing, while others require one or two physicians to certify incapacity. Families should read the document carefully or have an attorney explain when and how it activates.
A financial power of attorney gives the agent authority over the principal's money, property, and financial affairs. This is a completely separate document from the healthcare POA, and it covers a different set of decisions entirely.
A financial agent may be authorized to:
Pay bills and manage bank accounts
File tax returns
Handle insurance claims or benefits
Sell or manage real estate
Make investment decisions
Apply for government benefits like Medicaid or veterans' aid
Financial POAs come in two main forms:
Durable: Takes effect immediately when signed and remains in effect even if the principal becomes incapacitated. This is the most common type recommended for older adults.
Springing: Only takes effect when a specific triggering event occurs, such as a physician certifying the principal's incapacity.
Which type is right for your family depends on your parent's preferences and circumstances. A durable financial POA can be helpful if your parent wants someone to start managing bills right away. A springing POA may feel more comfortable if they want to retain control until they truly need help.
Either way, the financial POA does not give the agent any authority over medical decisions, and a healthcare POA does not let the agent access a bank account or pay a bill.
This is where families often run into trouble. They assume that having "power of attorney" means they can handle everything. But a family member in Greenbelt, MD, who holds only a healthcare POA cannot call the bank to transfer funds, even if the money is needed to pay for their parent's care. And a family member who holds only a financial POA cannot authorize a surgery or speak with doctors about treatment plans.
Think of it this way:
Healthcare POA = authority over the body
Financial POA = authority over the wallet
These two roles can be assigned to the same person or to different family members. Some families choose to split the responsibilities, for example, naming one adult child who lives nearby as the healthcare agent (since medical decisions often require quick, in-person involvement) and another who has financial expertise as the financial agent.
That said, splitting roles can create coordination challenges. If your family is navigating this kind of decision, clear communication is essential. If your family is struggling to agree on care decisions, this guide on finding common ground may help.
This is the detail that catches many families off guard: a power of attorney can only be created while your parent is still legally competent, meaning they understand what the document is, what authority it grants, and who they're naming as their agent.
If a parent develops advanced dementia or suffers a sudden medical emergency that leaves them unable to communicate, it is generally too late to establish a POA. At that point, the family may need to pursue a court-appointed guardianship or conservatorship, a process that is more time-consuming, more expensive, and more emotionally difficult.
For families in the Lanham, MD, area who have noticed early signs of cognitive decline (missed appointments, confusion with medications, trouble managing finances) the window to have this conversation is now, not later. If your parent has been diagnosed with or is showing signs of dementia, our Caregiver's Complete Guide can help you understand what to expect and how to plan ahead.
Maryland law has its own requirements for how POA documents must be signed and witnessed. An elder law attorney licensed in Maryland can make sure the documents meet state-specific standards and reflect your parent's wishes.
Before meeting with an attorney, it helps to have a few things ready:
A list of your parent's financial accounts (banks, investments, insurance policies)
Contact information for their primary care physician and any specialists
Any existing legal documents, including a will, trust, or advance directive
Your parent's preferences about medical care, especially end-of-life wishes
Questions worth asking an attorney include:
Should the financial POA be durable or springing?
Can the healthcare POA include specific instructions about treatments my parent does or does not want?
Does the POA need to be re-executed if my parent moves to a different state?
What happens if the named agent is unable or unwilling to serve?
If you've already started thinking about legal planning, you may also be weighing care options. Once you have legal planning underway, the next step is often evaluating care options. Here's a practical guide for families near Lanham, MD..
Establishing power of attorney isn't about taking control away from a parent. It's about making sure someone your parent trusts can step in when they need help. Having both a healthcare POA and a financial POA in place means your family won't be caught off guard by a hospital admission, a bank policy, or a billing dispute.
For a broader view of the legal documents families should have in place, download our Step-by-Step Guide to Legal Planning for Seniors.