Being named as someone’s Power of Attorney is both an honor and a significant responsibility. One of the most common misconceptions I encounter is that holding POA gives you unlimited control over your parent’s life and finances.
The reality is quite different. Your authority is strictly limited by the document itself, state law, and your fiduciary duty. Here’s what you can—and absolutely cannot—do when you hold this important role.
Understanding What a Power of Attorney Really Is
A Power of Attorney allows you (the “Agent”) to act on behalf of your loved one (the “Principal”). It’s a license to manage their affairs as if you were them, but it’s not a transfer of ownership. The assets still belong entirely to them; you’re simply the manager.
Financial vs. Medical: Two Different Powers
Many people don’t realize these are typically separate documents. A Financial Power of Attorney gives you authority over bank accounts, real estate, taxes, and bills, but it doesn’t let you make medical decisions. A Healthcare Power of Attorney (or Healthcare Proxy) authorizes you to speak with doctors and make medical decisions, but it doesn’t give you access to financial accounts.
Never assume you have both powers; always verify which documents actually exist and what they authorize.
What You Cannot Do, Even With POA
Even with a comprehensive Power of Attorney, certain actions are off-limits. You generally cannot change your parent’s Last Will and Testament or designated executor, vote in political elections on their behalf, pay yourself a salary or gift yourself their money (unless explicitly authorized, and even then it’s risky), or change beneficiaries on insurance policies or retirement accounts to benefit yourself.
Your Fiduciary Duty: The Highest Standard
As an Agent under a Power of Attorney, you’re held to a fiduciary standard, which is the highest duty of care recognized by law. This means you must always act in the Principal’s best interest, never your own.
Before every transaction, ask yourself: “Does this benefit my parent, or does it benefit me?” If the answer is “me,” don’t do it. You must also keep meticulous records. Save every receipt. If family members question your actions later, you’ll need to prove where every dollar went.
When Does Your Authority Begin?
The document’s “effective date” clause determines when you can act. An Immediate POA grants authority the moment it’s signed, even if your parent is healthy. A Springing POA only becomes effective after a doctor certifies your parent as incapacitated, and until then, you have no authority.
Why Banks Can Be Difficult
Even with a valid POA, banks may refuse to honor it if the document is outdated or lacks specific banking language. Don’t wait for a crisis; bring the POA to the bank now, while your parent is healthy, to get it registered with their legal department.
The Bottom Line
A Power of Attorney is designed to protect your loved one, not to give you power over them. It’s a shield, not a sword. If you’re uncertain whether a specific action is within your authority, it’s always better to seek guidance before proceeding.
If you have questions about your Power of Attorney responsibilities or need help understanding your legal authority, contact the Law Offices of Laurie E. Ohall at (813) 438-8503 for personalized guidance.