What Happens When There’s No Power of Attorney in Place?

Planning ahead is critical when it comes to aging at home. One of the most important legal tools for seniors and their families is a Power of Attorney (POA)—a document that gives someone the authority to handle financial or legal matters on another person’s behalf. But what if there’s no POA in place?

Quick Answer:

If there’s no power of attorney, no one—including spouses or adult children—can legally manage the person’s finances or make key decisions. Families may have to go through court to request guardianship or conservatorship, which can be time-consuming, expensive, and emotionally draining.

What Is a Power of Attorney and Why Does It Matter?

A Power of Attorney is a legal document that allows someone—called an agent or attorney-in-fact—to act on behalf of another person in financial or legal matters. These may include:

• Paying bills
• Managing bank accounts or retirement funds
• Selling property
• Handling insurance paperwork
• Signing legal documents

There are different types:

• General POA gives broad financial powers.
• Durable POA remains in effect even if the person becomes incapacitated.
• Springing POA activates only if specific conditions are met (like a medical diagnosis of incapacity).

In home care situations, a durable POA is especially important. It ensures someone can manage the person’s affairs if they become unable to do so due to illness, injury, or cognitive decline.

What Happens If There’s No Power of Attorney?

When no POA is in place and the person loses the ability to make decisions, families often find themselves stuck. Banks, insurance companies, and healthcare providers cannot legally share information or allow access—even with close family members.

Here’s what can happen:

• Frozen accounts: No one can pay bills, access savings, or manage income.
• Delayed care: In-home care arrangements may be stalled due to lack of authority to sign contracts or approve payments.
• Missed deadlines: Financial aid applications, tax filings, or benefit renewals may be missed.
• Legal complications: Without authority, loved ones cannot act—even if they know the person’s wishes.

It’s a situation many families don’t expect until it’s too late.

Does a Spouse or Adult Child Automatically Have Authority?

No. Contrary to popular belief, being a spouse or adult child does not automatically give you legal authority to manage someone else’s affairs. Without a signed and valid POA document, even close relatives can be denied access or decision-making power.

What Is Guardianship or Conservatorship?

If there’s no POA and the person is already incapacitated, the family may have no choice but to petition the court for guardianship or conservatorship.

Key points:

• Guardianship typically covers personal and medical decisions.
• Conservatorship covers financial decisions.
• The process can take weeks or months.
• It often requires attorney involvement, court hearings, and ongoing court supervision.
• It may cost thousands of dollars in legal fees.

In the meantime, bills go unpaid, accounts are frozen, and essential decisions are delayed.

Impact on In-Home Care Planning

In-home care often requires quick, flexible decisions—like scheduling caregivers, approving care plans, or making home modifications. Without a POA:

• Agencies may require legal proof before starting care.
• Families may struggle to pay out-of-pocket costs.
• Home safety improvements may be delayed due to inaccessible funds.
• Insurance paperwork can’t be submitted or followed up on.

In short, the lack of a POA can create dangerous delays in care.

Real-Life Example

Consider this: A daughter is caring for her 82-year-old father who recently had a stroke. He’s unable to speak or manage his affairs. She tries to access his bank account to pay the caregiver—but the bank refuses. Without a POA, she has no authority. To gain access, she’s forced to go to court for guardianship, a process that takes over two months while unpaid bills pile up.

Common Misconceptions About POA

Many people assume their family can just “step in” if needed. Here’s the truth:

• “I’m the spouse—I can act for them.” Not without legal authorization.
• “They told me what to do.” Verbal instructions don’t count in legal matters.
• “We have a will already.” A will only takes effect after death—it doesn’t help during life.

These misconceptions lead many families into unexpected legal crises.

How to Avoid This Situation

The good news is that setting up a POA is simple and affordable. To prevent future problems:

1. Discuss the need for a POA early. The document must be signed while the person is still mentally competent.
2. Work with an elder law attorney to draft a durable POA that meets state requirements.
3. Choose a trusted agent who is organized, reliable, and willing to act when needed.
4. Make copies and share them with banks, doctors, and care providers.
5. Review the document regularly and update it if circumstances change.

Setting up a power of attorney is only part of the equation. To ensure your loved one’s medical and financial needs are fully covered, it’s important to understand how this document differs from a health care proxy. Most families benefit from having both in place. You can learn more about the distinction by reading our post on the difference between a health care proxy and a power of attorney.

Final Thoughts

Not having a power of attorney in place can lead to legal, financial, and emotional turmoil during an already stressful time. Without this simple document, families may be blocked from helping their loved ones when it matters most. Don’t wait for a crisis—have the conversation, complete the paperwork, and protect your family’s future.

Reference Links:

Nolo – What Happens If You Don’t Have a Power of Attorney?
https://www.nolo.com/legal-encyclopedia/what-happens-if-you-don-t-have-power-attorney.html

Consumer Financial Protection Bureau – Managing Someone Else’s Money Guides
https://www.consumerfinance.gov/consumer-tools/managing-someone-elses-money/