John Worley Blog

What is Power of Attorney?

John Worley - Monday, October 04, 2010

What Is a “Power of Attorney”?

A “power of attorney” is a written document in which you (the “principal”) appoint someone else (called the “agent” or “attorney-in-fact”) to act for on your behalf. Your agent can do any legal act you ask him or her to perform.

Why Is a Power of Attorney Important?

Everyone should think about having a power of attorney. This can be more important to your personal well being than a will. The power of attorney allows you to pick someone you trust to handle your affairs if you cannot do so yourself. It gives you peace of mind, reassuring you that in an emergency, someone you choose will have the authority to act for you. If you don’t have a power of attorney and you become incapacitated, your family may have to go through an expensive and time-consuming court action to appoint a guardian or conservator to make decisions for you.

Are There Different Types of Powers of Attorney?

Yes. Powers of attorney can differ depending on when you want the powers to begin and end and on what or how much responsibility you want to give your agent.


A conventional power of attorney begins when you sign it and continues until you become mentally incapacitated. But most people want someone to make decisions for them when they are unable to do so. If so, you have to say so in your document.

A durable power of attorney also begins when you sign it, but it stays in effect for your lifetime unless you cancel it. You must put specific words in the document stating that you want your agent’s power to stay in effect even if you become incapacitated. If you want this feature, it’s very important that you have these words in your document.

A springing power of attorney begins only when a specific event happens, such as when you become incapacitated. Your attorney must carefully draft a springing power of attorney to avoid any difficulty in determining exactly when the “springing” event has happened.

All powers of attorney come to an end at your death. Your agent will have no power to make any decisions after you die.


You can select the responsibilities, or powers, you want your agent to have. You can authorize your agent to do one thing, such as sell your car. Or you can give your agent the authority to do any legal act you could do yourself. You can give the agent a wide range of powers, such as having access to bank accounts, selling stocks, and managing real estate. Often, powers of attorney are given to make healthcare decisions when you are not able to do so for yourself . Design your power of attorney to fit your anticipated needs.

Can a Bank or Other Institution Refuse to Honor a Valid Power of Attorney?

State laws vary as to whether they penalize a third party, such as a bank or brokerage, for refusing to honor a power of attorney. The best answer to the question is to avoid the problem by being prepared. Once you’ve signed a power of attorney, contact any financial institutions where you have accounts, safe-deposit boxes, securities, and the like. Give the firms copies of the document and ask whether they have any questions or whether you have to sign other documents, such as authorizations or signature cards. Taking these actions, you can generally avoid any difficulty.

Whom Should I Choose as My Agent?

No one can tell you whom to choose as your agent. The person you choose needs to be someone you trust and someone who can do the job. It is best to avoid someone who is ill, inexperienced in financial matters, has a hard time managing their own money, or for some other reason wouldn’t be able to handle the responsibilities. Between two equally qualified persons, the one who lives closer to you is generally the better choice.

Can I Name My Two Children as Co-Agents?

The law permits you to appoint co-agents. However, that may not be a good idea. To make decisions, the two must agree. If they disagree, they may have to go to court. This is really expensive, time-consuming, and defeats the major reason for having a power of attorney. If you have two equally qualified persons to choose between, you may want to name one as your agent and the other as a substitute to step in if your first choice cannot serve. You could also appoint one to make financial decisions and the other to make health care decisions. This is your choice. Do not allow yourself to be talked into selecting anyone other than the person you want.

I Already Have a Will. Can’t My Executor Handle My Affairs?

No! Your will determines how your property will be distributed after you die. Your executor has no authority to act before your death. Your power of attorney deals with how to manage your property during your lifetime. On the other hand, your agent has no authority to act after you die.

Can I Still Manage My Own Affairs If I Sign a Power of Attorney?

Even if you sign a power of attorney, you can still manage your own affairs. You are not giving up anything. Instead, you are taking steps today so that your agent will be able to act when and how you have directed, if or when it becomes necessary.

Can I Cancel a Power of Attorney After I Sign It?

Yes. You can cancel, or revoke, a power of attorney at any time by tearing it up, by signing a new one, or by writing that you want to cancel it. You don’t have to give any reason. If you do cancel, it’s important to let your agent and anyone your agent has been dealing with know that you have canceled the agent’s authority.

If I Give a Power of Attorney to Another, Do I Give Up the Right to Manage My Own Affairs?

No. As long as you remain legally competent, you retain full control over your affairs. Think of your agent under your durable power of attorney as an understudy waiting in the wings to help you. You don’t hand over top billing until you want your agent to perform. You can change your mind.

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