When someone gives you power of attorney, they have given you the legal authority to make financial, legal, or healthcare decisions on their behalf. You can grant power of attorney under predefined terms, limited to specific circumstances and timeframes. Many people grant powers of attorney to a family member, trusting them to act in their best interests. When a family member abuses this power, it can be damaging to everyone in the family.

What is power of attorney?

A power of attorney is a legal document that gives an agent or attorney-in-fact the legal right to make decisions or act on the principal’s behalf. Property or business owners will frequently give their attorney or another designated person the power to make decisions and sign documents on their behalf when they are unavailable or away. Individuals can also grant power of attorney to another person when they are away on vacation or ill, or as a preventative measure in case they become incapable of making decisions due to illness.

Type of power of attorney

Most powers of attorney are either financial or medical. A financial power of attorney will make financial and legal decisions on the principal’s behalf. They may make investments, litigate in court, and hire professionals to assist with their duties. A medical power of attorney may make medical decisions, consent to medical and surgical procedures, and select caregivers on the principal’s behalf.

The power of attorney can be broad or defined in scope, allowing the agent to make decisions under specific circumstances. Power of attorney typically ends when the principal decides to revoke the contract, the court invalidates it, the agent cannot meet the power of attorney requirements, or the power of attorney is no longer needed.

Power of attorney terms

A power of attorney can also differ in terms. A durable power of attorney takes effect as soon as it is signed. Unless it is revoked, a durable power of attorney remains in effect throughout the person’s lifetime.

A nondurable power of attorney also takes effect as soon as it is signed. However, it only remains in effect until its purpose is served. It can expire after a certain date when a circumstance has been met, or if the principal becomes incapacitated.

A springing power of attorney takes effect only after the principal has been confirmed to be incapacitated.

What are the responsibilities of a power of attorney?

A power of attorney is trusted to act on behalf of the principal. They have a fiduciary responsibility to put the principal’s interests ahead of their own. An agent is expected to manage a principal’s affairs with the utmost level of care and competence, abide by the terms of the power of attorney, and remain within the limits stated in the document.

The agent must also communicate with the principal and their family members. They should provide regular updates on the decisions they are making and their outcomes. A power of attorney is expected to keep detailed records of their transactions, decision-making, and financial and legal consequences.

Can a family member serve as power of attorney?

Yes, a family member can serve as power of attorney. It is even possible to designate multiple family members to act as a power of attorney. Different people can be selected as financial or medical powers of attorney. Multiple people can be given equal power of attorney over financial and medical affairs. A principal can give power of attorney to anyone they feel will best act on their behalf.

Frequently, family members are asked to be a power of attorney because they are most likely to be familiar with the principal’s goals and needs. However, giving multiple people power of attorney increases the risk that they will not agree on what course of action is best for the principal.

If a family member believes that the principal did not have the capacity to sign a power of attorney or was under undue influence to name someone as their power of attorney, family members can challenge the power of attorney in court. Family members or other interested parties can also petition the court to revoke a power of attorney if they believe the agent is not acting in the principal’s best interest.

If a family member or other agent is abusing power of attorney, contact the principal’s attorney of record. This is a serious matter, and your attorney can discuss your concerns and advise on the best way forward.

If you have questions about power of attorney or want to learn about how to protect your assets and property with a comprehensive set of estate planning tools, contact us.