what are the legal ramifications of a power of attorney over someone

When you are given power of attorney by someone (referred to as the grantor, principal,, or donor), you are legally empowered to act as their agent. You can conduct business transactions as outlined in a general or limited power of attorney agreement, and in the eyes of the law, you are the grantor.

Full Answer

What are the powers of a power of attorney?

However, generic POA documents grant an agent broad powers, subject to the limitations of state law. All agents are fiduciaries of the principal. This is a legal concept that requires the agent to act in the principal's best interests. For example, an agent cannot transfer your entire bank account into their own personal funds.

What are the risks of having a power of attorney?

Risks Sometimes the risks of appointing a power of attorney outweigh the convenience. If the power of attorney oversteps his or her bounds, he or she can cause a lot of havoc. Sometimes a person provides a number of important powers to the agent because he or she makes the designation too broad.

What are the limitations of a power of attorney?

All power of attorney agreements can be limited by choice. For example, as principal, you could include a clause that prevents your agent from selling your home or other designated property. However, generic POA documents grant an agent broad powers, subject to the limitations of state law. All agents are fiduciaries of the principal.

Can a power of attorney be created for another person?

A power of attorney can only be created if the person granting the power of attorney understands what type of document they are signing. If the person who is granting the power of attorney is incapacitated, then they cannot create a power of attorney for another person to sign.

Risks of giving someone a POA

Your agent has broad powers and, unless you use a springing POA , can begin acting on your behalf the moment the document is signed . Make sure y...

After giving a POA, can I make my own decisions?

Yes. Both you and your agent can act on your behalf unless you are declared legally incapacitated . However, you are bound by your agent's choices...

Is it possible to name two agents?

Yes. You can name two or more agents to act on your behalf or create a system where a second agent is granted duties if the first agent dies or b...

Risks of giving someone a POA

Your agent has broad powers and, unless you use a springing POA , can begin acting on your behalf the moment the document is signed . Make sure y...

After giving a POA, can I make my own decisions?

Yes. Both you and your agent can act on your behalf unless you are declared legally incapacitated . However, you are bound by your agent's choices...

Is it possible to name two agents?

Yes. You can name two or more agents to act on your behalf or create a system where a second agent is granted duties if the first agent dies or b...

What is an enduring power of attorney?

The enduring power of attorney agreement gives the appointed attorney the abilities of a power of attorney in the case that the person becomes incapable of doing so. If the person never becomes mentally incapable, the power of attorney agreement essentially does nothing.

What is a POA?

As people get older, it is generally recommended that they appoint a power of attorney (POA). Without fully understanding the extent of the duties and responsibilities, people often accept the role, intending to be as helpful as possible during difficult times in their loved one’s life. Generally speaking, the power of attorney is responsible for making financial and legal decisions on the person’s behalf, in the case where they become incapable of doing so themselves. Usually, the attorney can make any financial or legal decision the person could have made themselves. Before accepting the role of the Power of Attorney, it is important to understand the role (what you might be expected to do) and the rights you have available to you as the person’s attorney.

What is the job of a prescribed record?

Keep prescribed records and produce the prescribed records for inspection and copying at the request of the adult.

Can an attorney resign as a power of attorney?

In some cases, the attorney no longer wishes to continue in this position as the person’s attorney. At any time, the attorney is able to resign as the power of attorney and relieve themselves of all the duties of the power of attorney. To do so, a letter of resignation must be given to the person and any other people acting as a power of attorney.

Can a power of attorney make a will?

The power of attorney is sometimes in a position where they must do a lot of the estate planning for the incapable person and often times this means gift giving before their death. It’s important to understand that a power of attorney does not have any authority to make a will or change an existing will on the incapable person’s behalf, though the attorney can handle some estate related financial tasks.

Can an adult invest in power of attorney?

Unless the enduring power of attorney states otherwise, invest the adult’s property only in accordance with the Trustee Act;

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He is beginning his studies at the University of British Columbia in 2020.

Financial Power Of Attorney

This designates an attorney-in-fact to make a wide range of financial decisions. You do not lose any rights to make these decisions when a lawyer drafts POA here in Washington state. Instead, you simply add another person who has the ability to make decisions covering the following:

Healthcare Power Of Attorney

A healthcare power of attorney is a contingency plan that designates an agent who can make decisions or execute instructions if an individual or principal is incapacitated or otherwise unable to make decisions in regard to their health care. This can be helpful in the following situations:

The Implications Of POA

Make sure the person you choose to give durable power of attorney is someone you trust. They will have access to your assets and will be able to make the same decisions as you would, so extra care should be taken in electing a power of attorney.

Contact Us Today To Prepare Your POA

Call our Normandy Park office at 206-408-1688 or contact us through our website.

What is a durable power of attorney?

General Durable Power Of Attorney. This is the standard POA agreement for wills, estates, and finances. Agents can buy and sell property, pay bills, and conduct other financial business for the grantor. Durable means it remains binding should the grantor become incapacitated or pass away.

Why are POAs becoming more common?

These POAs are becoming more common due to the amount of fraud and theft committed by agents with a general durable power of attorney. The stipulations of limited durable POAs varies by individual, but well-written limited POA agreements have precise requirements to which the agent must follow.

What is a limited POA?

This is a simple, limited POA that allows the agent to make healthcare and medical decisions should the grantor become incapacitated and require guardianship. It’s essential to recognize that this type of POA carries an extremely low risk for the agent, and no agent will be held financially responsible for the medical bills of the grantor.

How to guarantee zero liability in POA?

Remember that the one way to guarantee you have zero financial or legal liability is to reject the grantor’s request to be their agent in a POA agreement. Agreeing to act as an agent for a friend or loved one seems like a natural thing to do, but take time to give it serious consideration before you sign on the line.

Why is it important to put in the effort now?

Putting in the effort now will help ease the burden on you as a grantor in the future, and you can even rest better now knowing trusted individuals are in charge during a medical or familial crisis.

What to ask when signing a POA?

It’s also important to ask who the other agents are if you are asked to sign a healthcare/medical POA. Knowing who your successors are on the POA can often alleviate tension and stress should it become necessary for you to discharge your duties as an agent. You may have to take a hard look at your life and recognize if you can’t meet your obligations to the grantor due to your life or financial circumstances.

Why do we need a limited durable power of attorney?

Creating a limited durable power of attorney agreement is an excellent way to protect everyone involved from potential risk , but there are other precautions you can take to avoid being accused of negligence, fraud, or outright theft.

What are the two types of POA?

There are many types of POA but the two most common you’ll come across are Durable and General Power of Attorney forms. These legal documents c...

How is the scope of the agent's responsibilities determined?

The scope of the agent's responsibilities is determined by the type of POA you sign, the details of the agreement, and the limits of state law.

What is a financial POA?

Unlike a medical power of attorney, a financial POA generally has no control of the principal's health care. Instead, they can make monetary decisions like buying or selling assets, paying bills, managing investments, and filing taxes.

What is a POA in medical?

Designating a medical POA grants the attorney-in-fact power to make health care decisions on your behalf. The agent's rights will range from choosing whether to perform surgery, what doctor or hospital treats you, and what medication you take.

What is a bill of sale?

A bill of sale gives written details of the property that is being transferred from one party to another and serves as legal evidence of the transac ...

What is a power of attorney?

A power of attorney is a legal document between two parties: the principal and the attorney-in-fact. The principal is the person granting someone else the ability to make legal decisions on their behalf. The attorney-in-fact, also known as the agent, has the authority to act on behalf of the principal.

Can a POA be used for incapacitating?

Typically, the agent can begin acting on your behalf once you sign a power of attorney agreement. If you decide you only want a POA to be valid in case of your incapacitation, you will draft what is known as a springing power of attorney. Likewise, if you want the agent to still maintain their rights and duties if you become incapacitated, you will need a durable power of attorney.

How to avoid pitfalls when establishing a power of attorney?

Selecting an Agent. One important way to avoid possible pitfalls associated with establishing a power of attorney is for the principal to select an agent he or she can truly trust. This individual may be a spouse or family member. In other situations, it may be a neighbor, friend, church member or other individual.

What does a principal want to select?

The principal may also want to select somebody who is organized and professional. Other precautions include not naming someone who has his or her own financial troubles, has a problem with organization, has a drug or gambling problem or has other traits that would make him or her unsuitable to serve in a primarily financial position. ...

What is a power of attorney?

A power of attorney is a legal designation in which one person gives another person, the agent, the right to make certain decisions on his or her behalf. This designation is usually provided to give someone the ability to make financial decisions and to conduct financial transactions on behalf of another person.

Why do people need a power of attorney?

A person may want to establish a power of attorney to handle a certain transaction, such as handling the sale of his or her home. He or she can also make the powers authorized only for a certain period of time, such as when he or she plans to be out of the country. A power of attorney is often used as part of a comprehensive estate planning tool.

What is the primary consideration when selecting an agent?

The primary consideration of selecting an agent is trust. However, there are other important things to consider, such as whether the person would follow the instructions and wishes of the principal, if he or she would be loyal and if he or she would avoid self-dealing.

Why does a person have a number of powers?

Sometimes a person provides a number of important powers to the agent because he or she makes the designation too broad. He or she might allow the agent to sell his or her real estate, operate a business, change beneficiary designations, modify a trust or take other action that can have long-lasting consequences.

Does a power of attorney have a durability clause?

Some states will imply a durability clause into every power of attorney so that it is durable unless the principal specifically states otherwise. In states that do not automatically infer durability, the power of attorney stops being effective upon the principal’s incapacitation if it does not include a durability provision.

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What is a power of attorney for health care?

Health Care: A health care power of attorney authorizes the agent to make medical decisions on behalf of the principal in the event that the principal is unconscious, or not mentally competent to make their own medical decisions.

What is an example of a power of attorney?

An example would be if someone develops dementia as they age or is unconscious after having been in a car accident. If a valid power of attorney exists prior to the principal’s incapacitation, then the agent has full authority to make decisions on the principal’s behalf, to the extent they were granted in the power of attorney document.

Why is a power of attorney important?

A power of attorney is especially important in the event of incapacitation. Someone is considered legally incapacitated when their decision-making skills are either temporarily or permanently impaired due to injury, illness, or a disability.

What to do if you are unsure of the meaning of a power of attorney?

If you are at all unsure of the meaning or consequences of signing the document, consult with an attorney to clarify everything first. The attorney will ensure that the document you sign is legally binding and that it conveys all of the powers you want it to, but nothing more. As with any document, the person that is signing and granting power of attorney must have the mental capacity to do so and must know what they are signing, or the document will not be valid.

What to do if you are unsure of the meaning of a document?

If you are at all unsure of the meaning or consequences of signing the document, consult with an attorney to clarify everything first. The attorney will ensure that the document you sign is legally binding and that it conveys all of the powers you want it to, but nothing more. As with any document, the person that is signing and granting power ...

Can a power of attorney be revoked?

A power of attorney can be revoked, so long as the principal remains competent. The principal may not revoke a durable power of attorney after incapacitation. Likewise, an already incompetent person cannot grant a durable power of attorney.

What is POA in law?

Creating a power of attorney document (POA) is not to be taken lightly. Apart from deciding on the type and following state-specific laws, your biggest responsibility is choosing the right person to handle your affairs. If you don’t, someone can take advantage of your trust and use the provided privileges for their benefit.

What is POA abuse?

Keeping detailed records of managing the principal’s assets. POA abuse is a legal claim that the agent hasn’t been acting in the principal’s best interest. It typically involves the following offenses: Theft.

What is a power of attorney?

A power of attorney is a legal document authorizing a person (agent) to act on behalf of the person creating the document (principal). A power of attorney comes in many forms, depending on the principal’s needs and circumstances. When deciding on the power of attorney type, you can choose between the ones presented in the table below:

Why do we need a durable power of attorney?

Any responsible individual should think about creating a durable power of attorney. It provides relief to know your affairs will be managed according to your wishes once you’re not able to take care of yourself.

What to do if someone abuses your power of attorney?

If you suspect someone is abusing power of attorney—be it yours or from a loved one—you should talk to a lawyer immediately. Depending on the circumstances and state laws, a lawyer can:

What does it mean to have authority to make financial decisions for someone else?

Getting the authority to make financial, medical, and other decisions for someone else implies certain responsibilities . The agent can decide on all matters determined by the document (as per state law) but has to do so with the principal’s best interests in mind.

What does the principal do in a real estate transaction?

Financial. The agent is given the power to manage the principal’s finances, including taxes, bank accounts, and real estate transactions.

What happens when someone gives POA?

When someone grants POA to another individual, it gives great power but also great responsibility. Unfortunately, some people who are granted the power of a POA are dishonest and may sometimes take advantage of the power for their own selfish interests. They may take money from a bank account, retitle investments, sell real estate or an automobile to a family member at far less than fair value, or even cause changes to a will, trust, or beneficiary designation in a life insurance policy. Some POAs even begin writing checks from the person’s account to pay their own bills. All of these can give rise to breach of fiduciary duty claims, which can lead to civil – and sometimes even criminal – remedies.

Why do people need a POA?

A person appoints a power of attorney (POA) to make decisions for himself or herself – usually a spouse, parent, or adult child — for a variety of reasons. Most commonly, people create POA’s to be prepared if tragedy strikes, such as a car accident, or the mental decline that often comes along with aging. Without a proper POA in place, a family of someone with dementia or Alzheimer’s disease, for example, would need to go to court to obtain guardianship or conservatorship to be able to protect and make decisions for the person no longer able to do so.

What is the legal action for a POA?

If the person who created the POA is still alive, then typically a guardianship or conservatorship proceeding is needed to appoint a proper decision-maker.

What is the second course of action in Michigan?

The second course of action is available if the person who was taken advantage of is no longer alive. Then, it is necessary to raise a breach of fiduciary claim in the name of the deceased person’s estate – through the personal representative (which is what executors are called in Michigan), or in a related court petition in probate court.

Can a breach of fiduciary duty be filed against a POA?

Even when the person who abused a POA in turns becomes the executor, a breach of fiduciary duty claim can still be filed against that person, if properly asserted in probate court.

Can you get conservatorship if you have a POA?

Just because a POA is already in place does not mean you cannot obtain guardianship or conservatorship. The probate court is there to protect vulnerable adults, as well as those who have passed away, and judges do remove legal authority from POAs who act improperly.

Can a POA be used as an executor?

Even when the person who abused a POA in turns becomes the executor, a breach of fiduciary duty claim can still be filed against that person, if properly asserted in probate court.

What is a POA in medical terms?

In addition to these three categories, there is a special power of attorney relating to health care known as a medical POA or a health care POA. This is a durable springing power of attorney that is limited to controlling decisions over end-of-life treatment. In some U.S. states, this is one of the advance directive documents used to ensure loved ones know the correct health care decisions for the principal as they near the end of life.

What is a limited POA?

Limited or General: General powers of attorney are the most common and provide the attorney-in-fact with broad control over the principal’s decisions. These often give the agent broad financial power, which explains why they are sometimes referred to as a financial POA. Comparatively, a limited POA (also known as a special power of attorney) only authorizes the agent to make decisions on highly particular matters. For example, for signing one specific document on the principal’s behalf.

How to override a POA?

A principal of sound mind can do so easily by making the agent and relevant third parties aware either verbally or in writing. Others can revoke a POA when the power of attorney rights are being abused. This does usually require going to court, so appoint an experienced lawyer that specializes in elder and/or disability law for the best chances of success.

When does a POA spring?

Springing or Immediate: An immediate power of attorney legally goes into effect as soon as the parties sign the document. On the other hand, a springing POA “springs” into action at a later date, usually after the principal becomes incompetent. As such, a springing power of attorney will always be durable.

When to put a POA?

A POA is typically put in place when the principal becomes legally “incapacitated” and unable to make decisions for themselves on matters regarding finance, real estate, or business such as those listed above. For example, the principal may have a mental incapacity that prevents them from managing their own affairs. Also, a temporary POA may be necessary if the principal is in the hospital or on holiday and needs someone to make important decisions until they are discharged or back in the country. However, at the time of appointing an agent and making a power of attorney, the principal must have full mental capacity and be aware of their choices.

What is a power of attorney?

A power of attorney, which is a legal document, gives an individual (known as the attorney-in-fact or the agent) legal control over the decisions of another person (known as the principal), allowing them to act on the principal’s behalf. The agent’s precise rights depend on the type of POA, financial or medical. They can be extremely broad or extremely limited, depending on the wording of the document. Here are a few examples of some of the decisions an attorney-in-fact may have legal control over:

Can a principal revoke a power of attorney?

There are times that the principal wishes to revoke the power of attorney document after signing it. For example, they may grant a family member control over their finances after they become mentally incapacitated. However, if this family member develops a gambling addiction, steals, or handles the money unwisely, the principal may wish to override the POA and pass the authority to make important financial decisions to another person. Likewise, if familial relationships deteriorate and the principal no longer believes their appointed attorney-in-fact will act in their best interests, they may wish to override the power of attorney and appoint another agent. The principal may only revoke the POA if they are still of sound mind themselves.