Healthcare POA vs. Financial POA: What's the Difference?

When planning for the future, especially for aging parents or yourself, you'll hear about "power of attorney" documents. But here's where it gets confusing: there are two completely different types - healthcare POA and financial POA. They serve different purposes, grant different powers, and you almost certainly need both.

I'm Christian Nichols, a licensed Pennsylvania notary who notarizes both types of POA documents regularly. Let me break down the differences in plain language so you can understand what each does and why both matter.

The Core Difference: Money vs. Medical

The fundamental difference is simple:

• Financial Power of Attorney - Controls money, property, and business decisions
• Healthcare Power of Attorney - Controls medical treatment and healthcare decisions

These are completely separate documents with different agents (though you can name the same person for both roles if you wish). One does not grant the powers of the other.

Financial Power of Attorney Explained

What It Controls

A financial POA (also called "durable power of attorney") allows your agent to handle:

• Banking and financial accounts
• Paying bills and managing expenses
• Buying and selling real estate
• Managing investments and retirement accounts
• Filing taxes
• Running a business
• Handling insurance claims
• Managing government benefits (Social Security, Medicare, VA)
• Making gifts or charitable donations (with proper authority)
• Hiring professionals (accountants, attorneys, etc.)

When It's Used

Your financial POA agent steps in when:

• You become mentally incapacitated (dementia, stroke, serious injury)
• You're physically unable to handle affairs (hospitalization, disability)
• You're traveling or deployed and need someone to manage things
• You choose to have help managing complex financial matters

What It CANNOT Do

Financial POA does NOT allow your agent to:

• Make any medical or healthcare decisions
• Decide on medical treatment, procedures, or medications
• Choose nursing homes or care facilities (from a medical standpoint)
• Access medical records or talk to doctors about your health
• Make end-of-life decisions or execute a living will

Note: While a financial POA can't make medical decisions, it CAN pay for medical care using your funds.

Healthcare Power of Attorney Explained

What It Controls

A healthcare POA (sometimes called "medical power of attorney" or "healthcare proxy") allows your agent to:

• Make medical treatment decisions if you cannot
• Choose doctors, specialists, and healthcare providers
• Access your medical records under HIPAA
• Decide on surgical procedures and treatments
• Consent to or refuse medications
• Choose rehabilitation or care facilities from a medical perspective
• Make decisions about life-sustaining treatment
• Decide on organ donation (if specified)
• Implement your living will or advance directive

When It's Used

Your healthcare POA agent acts when you cannot make or communicate healthcare decisions yourself:

• You're unconscious or sedated
• You have dementia or cognitive impairment
• You're physically unable to communicate (stroke, intubation)
• You're mentally incapacitated temporarily (severe illness, injury)
• You're at end-of-life and cannot express wishes

What It CANNOT Do

Healthcare POA does NOT allow your agent to:

• Access your bank accounts or money
• Pay your bills or manage finances
• Sell your house or property
• Manage your business
• Make any financial decisions

Note: Healthcare POA can choose a nursing home based on medical needs, but can't sell your house to pay for it - that requires financial POA.

Side-by-Side Comparison

Why You Need Both Documents

Many people mistakenly think one "power of attorney" covers everything. It doesn't. Here's why you need both:

Real-World Example: Nursing Home Scenario

Your mother has dementia and needs nursing home care. Here's what each POA handles:

• Healthcare POA - Chooses the nursing home based on medical needs, talks to doctors, makes care decisions, consents to treatments
• Financial POA - Sells her house to fund care, pays the monthly nursing home bills, manages her Social Security and pension, files her taxes

Without both documents, you'd be stuck. Healthcare POA can't access her money. Financial POA can't talk to her doctors.

Hospital Emergency Example

Your father has a stroke and is unconscious in the hospital:

• Healthcare POA - Talks to doctors, decides on surgery, chooses rehabilitation facility, accesses medical records
• Financial POA - Pays his mortgage while he's hospitalized, manages his business, handles insurance claims, pays medical bills

Both agents may need to work together (one making medical decisions, one funding them), but they have completely separate authority.

Should You Choose the Same Person for Both Roles?

You can name the same person as both your financial and healthcare agent, or choose different people. Consider:

Same Person for Both (Pros)

• Simpler coordination - one person handles everything
• Less potential for conflict between agents
• Works well if you have one highly trusted family member
• Easier communication with medical and financial institutions

Different People (Pros)

• One person may be better with finances, another with medical decisions
• Reduces burden on a single person
• Provides checks and balances
• May reduce family conflict if responsibilities are divided

There's no right answer - it depends on your family situation and who you trust most.

Living Wills and Advance Directives

Related to healthcare POA, you should also know about:

Living Will

A separate document where you state your wishes about life-sustaining treatment if you're terminally ill or permanently unconscious. Your healthcare POA agent implements these wishes. A living will addresses specific scenarios (like whether you want to be on a ventilator), while healthcare POA names the decision-maker.

Advance Healthcare Directive

In Pennsylvania, this often combines healthcare POA and a living will into one document. It names your healthcare agent AND states your end-of-life wishes. Many people prefer this combined approach for simplicity.

Pennsylvania Specifics

In Pennsylvania, here's what you need to know:

• Financial POA - Uses the statutory form under 20 Pa.C.S. § 5601 or custom attorney-drafted document. Must be notarized or witnessed by two people.
• Healthcare POA - Uses the statutory form under 20 Pa.C.S. § 5461 or combined advance directive. Must be notarized or witnessed by two people (witnesses cannot be your healthcare provider or related to you).
• Both are presumed durable - They remain effective if you become incapacitated, unless you specify otherwise.
• Both can be revoked - While you're mentally competent, you can revoke either POA at any time.

Getting Your POA Documents Notarized

Both financial and healthcare POAs should be notarized for maximum acceptance and protection. While Pennsylvania allows witnesses instead, notarization is strongly preferred because:

• Hospitals always accept notarized healthcare POAs
• Banks and financial institutions require notarized financial POAs
• Out-of-state recognition is better with notarization
• Notarization provides stronger legal evidence

As a mobile notary, I can come to your home, office, assisted living facility, nursing home, or hospital to notarize both documents. I'll verify identity, ensure understanding, and complete proper notarization for each POA.

Action Steps: Getting Both POAs in Place

1. Consult an attorney or use reputable legal service - Prepare both financial and healthcare POA documents
2. Choose your agents carefully - Decide who will handle financial vs. healthcare decisions
3. Discuss your wishes - Talk to your agents about your preferences and expectations
4. Schedule notarization - Have both documents properly notarized
5. Distribute copies - Give copies to your agents, doctors, and financial institutions
6. Store originals safely - Keep in a fireproof safe or with your attorney
7. Review periodically - Update every few years or when circumstances change