What A Power Of Attorney Can And Cannot Do

A power of attorney is an important legal document that allows someone you trust to handle certain matters on your behalf. Experienced attorneys such as our friends at NW Legacy Law know that a power of attorney is a valuable part of an estate plan, giving you peace of mind that your financial and personal affairs will be managed even if you become unable to do so yourself. However, a power of attorney has limits, and understanding what it can and cannot do is key to using it effectively.

What A Power Of Attorney Can Do

A power of attorney grants authority to another person—called an agent or attorney-in-fact—to act in your place. The scope of this authority depends on local and state laws, your wishes, and how the document is written.

A financial power of attorney allows your agent to manage your bank accounts, pay bills, handle investments, file taxes, and conduct other financial transactions. This authority can be broad or specific, depending on your needs. Some people use it temporarily, such as when traveling or recovering from surgery, while others create a durable version that remains valid if they become incapacitated.

A health care power of attorney, on the other hand, gives your chosen representative the ability to make medical decisions if you cannot communicate your wishes. This might include approving treatments, selecting care facilities, or working with doctors on your behalf. Combined with an advance directive, this type of document provides clear guidance during critical moments.

In short, a power of attorney can be a practical and flexible tool to help maintain your affairs and reduce the burden on loved ones when unexpected events occur. An experienced power of attorney lawyer can discuss your needs and wishes and help you craft a power of attorney that is right for you.

What A Power Of Attorney Cannot Do

While the document provides significant authority, it does not grant unlimited power. An agent cannot make decisions that go beyond what the document allows or that violate the law. For example, your agent cannot rewrite your will, change beneficiary designations on life insurance policies, or transfer property for personal gain unless explicitly permitted.

A power of attorney also becomes invalid after your death. Once that occurs, your executor or personal representative takes over the management of your estate according to your will or state law. Additionally, you must be mentally competent at the time you sign the document—if capacity is already in question, it may not be legally valid.

Setting Clear Boundaries

Choosing the right person as your agent and defining their powers carefully is crucial. Working with a lawyer helps you craft a document that reflects your preferences and meets state legal standards. This step helps prevent misuse and protects both you and your loved ones from potential disputes.

Taking The Next Step

A well-drafted power of attorney is an important part of estate planning that can protect your interests while setting appropriate limits. Reviewing or creating one can help you stay prepared for whatever life brings, with confidence that your affairs will be handled according to your wishes.