Know the Law: Power of Attorney

A Power of Attorney is a legal document which gives another person (your agent) the authority to make property, financial and other legal decisions for you. It is possible to make the legal authority to act in your name very broad or very limited. A common example of a limited Power of Attorney is to handle a specific transaction, like a house closing.

Many senior citizens sign a Power of Attorney granting complete authority to another person to handle all of their banking and finances, and make all of their money decisions.

In doing this, the senior tries to pick a person she trusts, often a relative, and asks that person to pay her bills and cash her checks. Sometimes she is planning ahead, fearing that she will become too ill or disabled to handle her own affairs. Other times, especially if her husband always took care of those things, she may feel uncertain and overwhelmed by those responsibilities.

Once signed, your Power of Attorney remains in effect until you die or revoke it in writing. This means that your agent can continue to handle your business even if you become physically or mentally disabled. It also means that the agent has no power to withdraw your money after your death.

Often a person signs a Power of Attorney in a lawyer’s office; that is not necessary so long as your signature is witnessed by a Notary Public.

Signing a Power of Attorney really gives your agent total control over your money and property. Therefore, it is critical that you choose someone you trust completely.
That person can be a family member, a friend, a professional business person, or anyone else you choose. If someone has suggested that you give them your Power
of Attorney, do not do it unless you are completely comfortable giving them a blank check to your accounts.
If you are uncertain about it, ask someone you trust
to help you.

You can give the Power of Attorney to two or more people (agents) at the same time. If you do this, you need to decide whether both agents must act together, i.e. both of them have to sign a withdrawal, a check, etc., or if each agent can act separately.

There is no person or government official to monitor Powers of Attorney. There is no on-going court supervision of your agent – that is up to you. The main disadvantage of a Power of Attorney is that it can be abused. Therefore, it is critical that you take great care in selecting who will be your agent before signing a Power of Attorney.

The person you give your Power of Attorney to is called your Agent or your Attorney-in-Fact. The Power of Attorney you signed remains in effect unless you revoke or cancel it in writing. So, if you decide you made a mistake when you gave someone your Power of Attorney, you are not stuck with that forever, you can sign a written Revocation of the Power of Attorney.

If you sign a Revocation, be sure to send it to your Agent with a letter telling him he no longer has the authority to sign papers in your name. Also send it to your banks or anyone else who you think has relied on the Power of Attorney that you signed. The reason for this is that the Agent or the bank can keep relying on the Power of Attorney until they have actual notice that it is no longer in effect. File the Revocation with the County Clerk’s Office if your Power of Attorney was filed there.

Just because a person has your Power of Attorney does not give that person (your agent) the right to do anything she pleases with your money, and she does not have the right to pay her own bills or use your money for herself. By law, the agent must act only in the best interests of the person who gave the Power of Attorney. The law requires the agent to be honest and loyal to you. The agent must keep your money in a bank account separate from her own.

The agent is also supposed to keep accurate financial records of their activities and what they did with your money and property. Many people do not do this, however. It is a good idea to tell the agent at the time you give her your Power of Attorney that you want her to keep good records and regularly provide detailed reports to you or another person you designate.

If you think your Agent is taking your money, or using your Power of Attorney in ways that you do not want, get help. Call your lawyer, Adult Protective Services, the Office for the Aging, the police or the District Attorney – or just tell someone you know and trust. They can help ask questions, get information, and prepare a Revocation of the Power of Attorney. If your agent is stealing from you, we can stop it.