A power of attorney (POA) is a legal document that gives someone (an agent) authority to act on behalf of another (a principal). The principal maintains the power to revoke a power of attorney for any reason, provided the principal is competent at the time of revocation. A power of attorney may also end upon a specific event or time. Let’s look at the legal authority of POAs and when a power of attorney ends.
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Types of Powers of Attorney
When legal authority begins and ends depends upon the type of power of attorney document created and the terms it defines. There are several kinds of power of attorney:
- A durable power of attorney that, once effective (immediately or upon a specific date or event), continues even if the principal becomes incapacitated.
- A springing power of attorney only becomes effective upon a specific date or event (i.e., incapacity of the principal). A springing power of attorney can be durable or not durable.
- A limited power of attorney is only effective for a specific period of time (i.e., the principal is on vacation) or to complete a particular task (i.e., a real estate transaction).
Each of these POAs can provide authority for different types of decision-making:
- Financial power of attorney: This gives someone the authority and fiduciary responsibility to handle the principal’s financial affairs. For example, the agent pays bills and manages financial matters.
- Healthcare power of attorney: This gives someone authority to make medical, nursing home, and even end-of-life decisions. Depending on your state, it can also be called a healthcare directive or living will.
- General power of attorney: This gives someone overall authority to make any decision on behalf of the principal allowed by state law.
When Does Legal Authority Invest in the Agent?
If a principal makes a power of attorney effective immediately, it becomes effective as soon as the principal signs it in front of a notary. The person you name as your agent (also called an “attorney-in-fact) has the legal authority to make decisions immediately on your behalf, the principal as defined in the power of attorney document.
If a power of attorney is springing, it is effective upon a specified date or event, such as the principal’s incapacity.
A limited power of attorney gives someone authority to take a specific, predetermined action or to act for a specific time frame. It becomes effective when it is signed or at a specific time. For example, a principal could use a limited POA to allow someone to represent the principal in the purchase or sale of real estate. Or they may allow someone to make financial decisions for a business when they are out of the country.
When Does a Power of Attorney End? When the Principal Revokes The Power of Attorney
Remember, a “durable” power of attorney continues even if the principal becomes incapacitated. However, a principal may revoke the POA at any time, provided that the principal is competent at the time of revocation.
If a power of attorney is not durable, the agent’s authority ends if the principal is incapacitated. And the principal can revoke the POA at any time prior.
A limited power of attorney expires when the specific task ends or upon the date specified in the legal document. The principal does not need to take any action to revoke authority. However, the principal can revoke the limited power of attorney at any time, provided the principal is competent.
Some states require a specific revocation document to be executed and provided to the revoked agent. As a practical matter, the principal should also provide a revocation to any financial institutions as needed to update their files.
When the Principal Dies
A POA automatically terminates upon the death of the principal. If any actions need to be taken after death, the executor or personal representative of the estate named in the will handles the estate.
When Terminated By a Court
Loved ones can challenge the agent’s authority if they believe the agent is not acting in the principal’s best interest. For example, suppose family members suspect a sibling with a financial power of attorney for their elderly mom is draining her bank account. In that case, they can take legal action to terminate the power of attorney.
Or suppose a court determines that a principal was incompetent when making a power of attorney or an agent obtained a power of attorney through fraud or coercion. In that case, the court may terminate the power of attorney.
When There Are No Agents To Serve
When naming someone as your agent, it is a good idea to name backup or successor agents if your first choice is unwilling or unable to serve. If your agent is unavailable and you did not select a backup agent, your POA ends.
What Happens to the Agent’s Authority?
If you were acting as an agent for someone who revoked your authority, your authority ends upon the revocation date.
If you were acting as an agent for someone who has died, your authority ceases upon the date of their death. When a death occurs, the estate administration follows the decedent’s will and may move through the probate process in probate court. Your role as an agent ends, and a personal representative or executor takes over managing the estate.
If you have questions about actions you took as an agent, you should contact an elder law attorney or estate planning attorney for legal advice under the confidentiality of an attorney-client relationship.
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Do You Want a Power of Attorney?
Now that you understand how power of attorney helps with medical and financial decisions while you are living, you can create your own POA utilizing our power of attorney forms. In addition, if you have not prepared a last will and testament or other estate planning documents, check out FindLaw’s Estate Planning Legal Forms and Services.
