Power of Attorney Rights and Limitations

It is important to know the different types of Power of Attorneys and understand what they can and cannot do for you.

General Power of Attorney: can act on your behalf for anything legal that you would be able to do yourself unless limitations are specified. If you do not make your agent durable, the document will be terminated if you become incapacitated. A durable power of attorney has permission to act on your behalf if you are unable to make your own decisions.

Although there are several types of POAs, the two most common types are medical power of attorney and financial power of attorney. A medical power of attorney acts on your behalf to meet your medical needs, while a financial power of attorney acts to meet your financial needs.

• Must be 18 years of age
• Must be mentally competent
• Can decline being named a Power of Attorney
• Can revoke their decision to be your Power of Attorney at any time
• Will terminate upon death

A power of attorney will continue to act with your best interest in mind, but there are certain limits on the decisions they can make for you. Some of these include:

• Testifying on your behalf
• Voting in a public election on your behalf
• Creating, changing, or revoking your will
• Designating someone else as your POA
• Rendering any services under contract
• Taking over responsibilities that were designated to someone else

You may choose your Power of Attorney to also be the executor of your will. If you die without a will, your Power of Attorney can petition the court to become the administrator of your estate.

You’ve heard it over and over again that when choosing your Power of Attorney, make sure you have complete trust in this person. Obviously, it is their duty to act in your best interest. However, giving someone full access to your accounts and other personal assets comes with risks.

Such precaution is not to suggest that violations of trust happen often, but there are cases of agents easily taking money for their own benefit. Your agent is not monitored by the court and if you are incompetent, you may be completely unaware of the misuse. Adding provisions to your document such as appointing someone to check in with your agent, or limiting their power to specific financial transactions can help prevent misdeeds from occurring.

Each state recognizes and utilizes Power of Attorney documents. However, these forms vary from state-to-state in how they are interpreted and accepted as a legal, binding document. Over half of the states have adopted the Uniform Power of Attorney Act (UPOAA), created in 2006 by the Uniform Law Commission. This act aims to create universal rules and determines which powers are included in the document and which must be explicitly addressed.

According to the article Uniform Power of Attorney Act | legalzoom.com written by Larissa Bodniowycz, J.D., a few of the key provisions stated in the UPOAA that help strike this balance are:

• A power of attorney drafted before the enactment of the UPOAA remains valid as long it complies with the law of the state at the time it was drafted.
• The agent's duties are spelled out in plain English.
• An agent is not liable for misconduct if they make a decision that is in the principal's best interests and they also benefit.
• Third parties do not have to honor a power of attorney if they have reported or know of a report of suspected physical or financial abuse by the agent of the principal.
• Powers of attorney from other states are accepted as valid if they complied with the laws of the state governing their creation.
• To be valid, a power of attorney created after the enactment of the UPOAA in the state requires the principal to sign it and acknowledge his or her signature in front of a notary public.

A Durable Power of Attorney is a great resource to add to your Estate Plan and it can give you peace of mind for your future and your family. Understanding what a Power of Attorney is capable of doing can help you choose wisely. It is their legal obligation to act in your best interest.

If you need help to explore or establish a power of attorney, contact a trusted, local expert for help.