Duties & limitations of a power of attorney

Written by wanda thibodeaux
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Duties & limitations of a power of attorney
You may choose anyone as your POA, but she should be trustworthy and organised. (sales representative image by Peter Baxter from Fotolia.com)

In some cases, it's simply not possible to handle the legal responsibilities you have or to make important decisions. For example, you can't pay your bills if you are in a coma. A power of attorney is a legal document that gives authority for someone to act on your behalf in these kinds of circumstances. A power of attorney has some limitations, and it is best applied when you understand what a power of attorney is supposed to do.

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Types

There are various types of powers of attorney. For example, there is medical power of attorney, which gives someone the right to make decisions about your health care. Financial power of attorney gives the person you select as your representative to handle money matters. Power of attorney also can be limited or general. With limited power of attorney, the attorney has to follow specific stipulations you indicate, such as only handling money for a specific account or for a designated period. Durable power of attorney only applies if you are incapacitated. With general power of attorney, there is no end date and your representative may handle any task you desire. The limitations that relate to power of attorney thus depend on which type you choose.

Fiduciary Duties

Regardless of how much authority you give your representative through your power of attorney, being a representative is a fiduciary task. This means that your representative has to operate under the fiduciary duties of loyalty and care. He must act in your best interests at all times and cannot personally gain from being your representative beyond the stipulations of the power of attorney document. He cannot, for example, take money from your bank account as a fee for services unless you specifically indicate that he is to be paid that amount.

Common Duties

Because there are so many different types of power of attorney, exactly what a representative carries out varies from one case to the next. Common tasks completed, however, include depositing or withdrawing money from accounts, paying bills, overseeing the sale of or protecting property, authorising physicians to perform procedures or prescribe medications, going to court on your behalf and speaking on your behalf to creditors, attorneys and other professionals.

Revoking the POA and Penalties

Giving someone power of attorney does not mean you relinquish your right to make decisions. As long as you are of sound mind, you call the final shots, and the representative must work with you and respect your wishes. If for any reason you are dissatisfied with what the representative does, you can revoke the power of attorney. Additionally, if your representative neglects his fiduciary duties and harms you financially or physically as a result, courts can impose fines for the abuse of power and appoint someone else to represent you.

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