Power-of-Attorney Basics

by Mary Ellis Patton

Powers-of-Attorney can be complicated and may include terms and language with which you are unfamiliar.  Here is a quick reference for the basics.

What is a POA?

 A “POA” is a written document where one person (the “principal”) appoints another person (called the agent or Attorney-in-Fact) to act with authority on their behalf to perform acts specified in the document.

Who Can Sign a POA?

Any person over the age of 18 years, who is mentally competent can sign a POA.  The type of mental competency required is generally considered to be the same as capacity to contract.  The individual does not need to understand each word and phrase, but needs to be able to understand that he or she is entering into a contract and is able to understand the basic nature of that contract.

Specific Powers Under a POA.

The POA might allow for specific actions that involve personal, health care, financial or legal affairs.  If a POA does not give you the authority to do something specific in writing, you may not be able to take that action.  This is especially true for selling the principal's real estate or making gifts of his or her property.  

If the POA covers health care, it needs to contain specific language regarding the Health Insurance Portability and Accountability Act of 1996 (HIPAA). 

The POA's Effective Date.  

POAs take effect in one of two ways.  First, it may take effect as soon as the principal signs it.  Secondly, the POA may take effect only when a certain event takes place.  Usually this “event” is the principal’s incapacity as determined by one or two licensed physicians.  If the POA is this second type, be aware that it may take significant time to get a physician to give you this determination in writing.  

The POA's End Date

Your duties to the principal end upon his death, or his revocation, or your resignation. 

If the principal has died, you must stop using the POA immediately.   If he has revoked the POA, you must stop using it immediately.  If you do not think that he had the competency required to revoke the POA, you should contact an Elder Law attorney to discuss your options. 

Lastly, you have the right to resign as agent.  The POA may specify the requirements for doing so.  Upon completion of any of the requirements, your responsibilities have ended. 

Learn more about Powers-of-Attorney here