Elizabeth S. Pagel, PLLC

Understanding Powers of Attorney

As an attorney I am often asked to draft a Power of Attorney for a client. There are a number of misunderstandings regarding this document.

There are two main people involved in a Power of Attorney. The first is the Principal, the second is the Agent. A power of attorney give the Agent authority to act on behalf of the Principal in conducting various business transactions. A prospective agent cannot ask an attorney to draft a Power of Attorney giving him the right to act on behalf of the Principal; the Principal must request the power of attorney.

There are numerous types of Powers of Attorney; the two most common are the Statutory Durable Power of Attorney and the Medical Power of Attorney. Each of them accomplishes different goals.

Statutory Durable Power of Attorney

A Statutory Durable Power of Attorney gives the agent the right to transact business on behalf of the principal. It can be as broad or as limited as the Principal wishes. Some of the possible powers given to an Agent include: real property transactions; stock and bond transactions; banking and other financial transactions; business operating transactions, personal and family maintenance; and retirement plan transactions. The Principal can authorize the Agent to make gifts to other people or entities out of his property.

Medical Power of Attorney

A Medical Power of Attorney give the Agent the authority to make medical decisions on behalf of the Principal. This is not to be confused with an Advanced Directive. An Advanced Directive sets out the Principal’s wishes if he or she is diagnosed with either a terminal or irreversible condition—whether the Principal wishes to receive all available medical treatment, or to receive only “comfort” treatment. An Advanced Directive is often referred to as a Living Will. Only the Principal can make these decisions; no Agent is designated, and a Medical Power of Attorney does not usually give the Agent the authority to make such end-of-life decisions.

A Medical Power of Attorney, on the other hand, is used to make medical decisions if the Principal is not able to make those decisions himself. For example, if the Principal is unconscious or mentally unsound, the Agent can consent to various medical treatments—NOT end-of-life decisions—on behalf of the Principal.

Whether executing a Statutory Durable Power of Attorney or a Medical Power of Attorney, the Principal must be competent to execute the Power of Attorney. He or she must be mentally sound and have the ability to understand what he or she is doing. Therefore, if the Principal is suffering from dementia or is unconscious, no Power of Attorney can be executed.

The Principal will decide when the Power of Attorney will become effective—either immediately or only upon a medical and legal finding of incapacity.

A Power of Attorney is not permanent. It can be revoked at any time by the Principal. It can terminate on a date specified in the Power of Attorney. If the Principal is married to the Agent, the Power of Attorney is terminated if the marriage is dissolved. It terminates automatically upon the death of the Principal or the appointment by the Court of a Guardian for the Principal.

If you believe you would benefit from appointing one or more agents to act on your behalf, consult an attorney.


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