What You Can and Can’t Do With a Power of Attorney

Q. My brother, Larry, who never married or had any children, asked me to be an agent under his Medical and Financial Powers of Attorney. Before I accept, I’ve been reading about what my role would entail. I am also considering getting my own estate planning in order. I was wondering if you could clarify something for me — what are the rights, responsibilities, and limitations when it comes to a Power of Attorney? Thanks for your help!

A. A Power of Attorney (POA) is a legal document that allows you to choose a trusted person who will act on your behalf if you ever become incapacitated and are unable to make decisions for yourself. The person that you choose to have the power to make these decisions is called your agent or attorney-in-fact.

The two types of powers of attorney are Medical Powers of Attorney (part of Advance Medical Directives) and Financial Powers of Attorney. A Medical Power of Attorney allows you to choose a trusted family member or friend to make medical decisions on your behalf if you are incapacitated. A Financial Power of Attorney gives your agent the authority to make legal and financial decisions on your behalf when you can no longer do so yourself. You may choose the same person to serve as the agent for both medical and financial decisions, or you may choose different people to serve in these roles. Regardless of who you name, you should always name at least one and preferably two or even more alternates if possible.

Power of Attorney Rights, Responsibilities, and Limitations

The powers that your appointed agent might have can be broad or narrow and will depend on how your documents are written. Here are a few examples of the kinds of decisions an agent can make with each type of POA.

Your health care agent might be able to make the following decisions:

• What medical care you receive, including hospital care, surgery, psychiatric treatment, home health care, etc. (these choices may of course be dependent on the financial means of the principal and the approval of their financial agent);
• The doctors you will see;
• Where you will live (this includes decisions regarding residential long-term care, such as assisted living, assisted living with memory care, and nursing homes. Again, the principal must be able to afford their living arrangements and the agent under your financial POA must approve these costs.);
• Who will bathe you;
• What you will eat.

Your financial agent might be able to make the following decisions for you:

• Access your financial accounts to pay for health care, housing needs, and other bills;
• File your tax returns;
• Make investment decisions for you;
• Collect debts that are owed to you;
• Manage your property;
• Apply for public benefits for the principal, such as Medicaid, Veterans benefits, etc.;
• Make gifts of your assets, and establish irrevocable trusts, in order to help get you eligible for Medicaid and veterans benefits.

Things That Agents Cannot Do

While agents might be granted broad authority to make decisions, there are several things that they are not able to do. Some of the things that agents can’t do include the following:

• Change your Last Will and Testament (but the POA can be written so that the agent can change the terms of your living trust);
• Break their fiduciary duty to you;
• Make decisions on behalf of the principal after their death. All authority granted under your POA ends with your death, although the Agent under your POA is often also named as the executor of your will and the trustee of your living trust;

Please read my article, What it Really Means to be an Agent Under a Power of Attorney, for more details on what the role of agent under a Power of Attorney entails.

The Uniform POA Act

As of 2020, 28 states follow the Uniform Power of Attorney Act (see the list of states below), a law that was created in 2006 to give universal rules for POAs across the states that have adopted it. The law determines which powers are included by default and which must be explicitly listed so that an agent will have them. Some of the provisions of the Uniform Power of Attorney Act include the following:

• Powers of attorney are valid once they are signed. You can then decide how involved you want your agent to be while you are still in possession of your faculties. For example, a financial agent could handle the day-to-day tasks of paying your bills and buying food, while you may continue to make your own investment and major purchasing decisions;
• Any compensation for decision makers must be explicitly detailed in the POA document;
• Third parties, such as banks, doctors, and other family members, cannot be held accountable for upholding the decisions of an agent with a POA document that appears to be legitimate.

States that have enacted versions of the Uniform Power of Attorney Act include Alabama, Arkansas, Colorado, Connecticut, Georgia, Hawaii, Idaho, Iowa, Kentucky, Maine, Maryland, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. Adoption of this legislation is pending in the District of Columbia, Massachusetts, and Tennessee.

An experienced Elder Law attorney, such as the attorneys at the Farr Law Firm, can discuss your desires and concerns and devise POA documents that clearly explain the extent of powers you want your agent(s) to have and any limitations that they must abide by.

Every Adult Should Have a Power of Attorney

Whether or not you believe you will be sick or unable to make important decisions someday, you never know what can happen or when it will happen. That’s why every adult should have both financial and medical powers of attorney in place. Signing these documents is called incapacity planning, and is also an integral part of comprehensive estate planning (estate planning goes further by disposing of your assets upon death, usually by means of a living trust to avoid the hassles and expenses of probate). Powers of Attorney offer the peace of mind that someone you appoint can step in if and when needed to handle your legal and financial affairs and health care decisions. If you have not done incapacity planning or estate planning yourself, or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, the time to plan is now. Please contact us at any time to make an appointment for an initial consultation:

Power of Attorney Lawyer Fairfax: 703-691-1888

Power of Attorney Lawyer Fredericksburg: 540-479-1435

Power of Attorney Lawyer Rockville: 301-519-8041

Power of Attorney Lawyer DC: 202-587-2797