What Can a POA Do and Not Do? Power of Attorney Rights and Limitations

Posted on December 6th, 2023

When it comes to legal tools that grant authority over important life matters, the Power of Attorney (POA) is a game-changer. 

But what can a POA do and not do? 

In this post, we'll explore the intricate world of Power of Attorney, shedding light on its remarkable capabilities and the critical constraints that ensure its responsible use. 

Join us on this journey as we demystify the powers and boundaries of this influential legal instrument.

What is a Power of Attorney?

A Power of Attorney is a legal document that grants an individual or entity the legal authority to act on behalf of another person, known as the principal. 

The person or entity receiving this authority is referred to as the agent or attorney-in-fact. 

The scope and duration of a POA can vary significantly based on the principal's wishes and the type of POA established.

Types of Power of Attorney

There are different types of POAs available:

• General Power of Attorney: Grants broad authority to the agent for various financial and legal matters.
• Limited or Specific Power of Attorney: Provides specific and limited authority for particular actions or timeframes.
• Durable Power of Attorney: Remains valid even if the principal becomes incapacitated.
• Springing Power of Attorney: Becomes effective only under specific circumstances or upon the occurrence of an event, such as the principal's incapacity.

Now that we've grasped the essence of Power of Attorney, let's delve into its rights and capabilities.

The Rights and Capabilities of a Power of Attorney

A Power of Attorney can provide the agent with a broad range of rights and capabilities, which can vary based on the document's language and the principal's intentions.

1. Managing Financial Affairs

One of the primary functions of a POA is to manage the principal's financial matters. This can include tasks such as paying bills, managing investments, accessing bank accounts, and overseeing real estate transactions.

2. Making Legal Decisions

A POA can grant the agent the authority to make legal decisions on behalf of the principal. This can involve entering into contracts, initiating or defending legal actions, and making decisions related to the principal's legal affairs.

3. Handling Healthcare Decisions

While a healthcare power of attorney or medical POA specifically addresses healthcare decisions, a general POA can include provisions for healthcare matters. The agent may be authorized to make medical decisions if the principal becomes incapacitated.

4. Conducting Real Estate Transactions

A POA can enable the agent to buy, sell, or manage real estate properties on behalf of the principal. This is particularly useful when the principal is unavailable or unable to handle these transactions personally.

5. Accessing Financial Records

The agent may have the right to access the principal's financial records, including bank statements, tax returns, and investment accounts, as needed to fulfill their responsibilities.

Having explored the rights and capabilities of a Power of Attorney, it's equally vital to understand its limitations.

The Limitations and Restrictions of a Power of Attorney

While a POA grants significant authority, it is not without its limitations and restrictions, which are essential to understand.

1. Acting Beyond the Scope

An agent must act within the scope of authority defined in the POA document. Any actions taken outside this scope may not be legally binding, and the agent could be held personally liable for such actions.

2. Acting Contrary to the Principal's Wishes

An agent must always act in the best interests of the principal and follow their wishes, as stated in the POA document. Acting against the principal's instructions or in a manner contrary to their best interests can lead to legal consequences.

3. Fiduciary Duty

Agents owe a fiduciary duty to the principal, which means they must act honestly, responsibly, and in good faith. Breaching this duty can result in legal liability.

4. Personal Gain

An agent cannot use the POA for personal gain at the expense of the principal. Self-dealing or using the principal's assets for the agent's benefit is strictly prohibited.

5. Acting After Revocation or Death

A POA's authority automatically terminates upon the principal's death or revocation of the POA. Continuing to act as an agent after termination can have legal consequences.

Related: What Are the Duties for Financial Powers of Attorney? 

Conclusion

Navigating the complexities of a Power of Attorney requires careful consideration of your unique circumstances and legal requirements. 

At Ronald J. Fichera Law Firm, we specialize in Estate Planning and can assist you in understanding, drafting, and executing the appropriate Power of Attorney documents to meet your needs.

Don't hesitate to reach out to us at (610) 768-9255 or [email protected] for expert guidance on what a POA can do and cannot do, as well as how to ensure your legal and financial affairs are in capable hands. Let us be your trusted advocates in securing your future and protecting your interests.