How Much Power Is in a Power of Attorney?

You are probably already familiar with the concept of a Power of Attorney. If you have not already, at some point you will likely create a Power of Attorney (POA) and/or be named as the Agent in a POA executed by someone else. Unfortunately, a Power of Attorney is also one of the most frequently abused legal documents. The Los Angeles estate planning attorneys at Schomer Law Group, APC explain how much power is in a Power of Attorney.

What Is a Power of Attorney?

At its most basic, a Power of Attorney is a legal document that allows you (referred to as the “Principal”) to grant another person (the “Agent”) the authority to act on your behalf in legal matters and transactions.  The type and extent of the legal authority you grant to an Agent depends on the type of POA you execute.  Failing to understand the extent of the authority granted in a POA is a common, and potentially very dangerous, estate planning mistake.

General vs. Limited Power of Attorney

A POA can be either general or limited. A general POA grants your Agent almost unlimited power to act on your behalf. This means that your Agent may be able to do things such as withdraw funds from your financial accounts, sell property and assets owned by you, and even enter contracts in your name. Although the law places some limits on the actions of an Agent with a general POA, you should never give someone a general POA if you have any doubt about their trustworthiness. 

A limited POA only grants to your Agent the limited, and specific, authority enumerated in the POA. For example, you might grant an Agent the specific power of attorney to act on your behalf during the sale of your vehicle while you are out of the state on a business trip.  A limited POA is also frequently used by the parents of a minor child to grant a caregiver the authority to consent to medical care for a child in the event it is needed on an emergency basis.

Durable Power of Attorney

You also need to know the distinction between a traditional and a Durable Power of Attorney. Historically, the authority granted to an Agent in a POA automatically terminated upon the death or incapacity of the Principal. As you may well imagine, however, the possibility of becoming incapacitated is a common motivation for executing a POA.  In other words, many people create a POA specifically to ensure that their Agent named in the POA has the authority to act on their behalf if they suffer a period of incapacity. That doesn’t work, however, if the POA terminates upon the incapacity of the Principal. To resolve this problem, the concept of a “durable” POA evolved. When a POA is made durable it simply means that the Agent’s authority survives the incapacity of the Principal.

Springing Power of Attorney

Yet another type of Power of Attorney is a Springing POA. Both a general and a limited POA can be a Springing POA. A Springing POA has special language in it that causes the Agent’s authority to “spring” into action at a specific time or upon the occurrence of a specific event. For example, you might create a general POA that does not actually go into effect unless you have been missing for more than 48 hours or until you have been declared incapacitated by a physician.

Power of Attorney for Health Care

One of the typical limits placed on even a general POA is the authority of the Agent to make health care decisions for the Principal. If you want to give someone this authority, you need to execute a Power of Attorney for Health Care, a type of advanced directive that allows you to appoint an Agent to make health care decisions for you if you are unable to make them yourself.

Contact Los Angeles Estate Planning Attorneys

For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about a Power of Attorney, contact the experienced Los Angeles estate planning attorneys at Schomer Law Group APCby calling (310) 337-7696 to schedule an appointment.

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Scott Schomer, Estate Planning Attorney

A graduate of Boston University School of Law, Scott P. Schomer is a frequent lecturer on estate planning and elder law issues, having discussed these important issues on local and national television. A seasoned courtroom advocate, Scott has obtained combined judgments and verdicts in excess of twenty-five million dollars for his clients. Scott has served as a member of the Los Angeles Superior Court Probate Volunteer Panel (PVP Attorney), Probate Settlement Panel and a Judge Pro Tempore. Scott's expertise has been recognized by his peers with such accolades as a life-time membership in the Multi-Million Dollar Advocates Forum, the Five Star Wealth Manager designation, and repeated nominations as California Super Lawyer.

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