Why a POA Matters – Part 2

In last week’s blog post I explained that a power of attorney is an especially important document in the event of a medical crisis.  It allows someone to act on your behalf to make financial and/or medical decisions if you can’t make them yourself.

Simply having such a document, however, isn’t enough.  What really matters is what is contained in that document.  What does the document actually say?  How specific is the language?  What does the power of attorney allow the agent to do on behalf of the principal or not do?

The agent may potentially need to present the document to a third party in many different situations and take many different actions on behalf of the principal.  Does the power of attorney expressly state the agent can take the action he or she is attempting?  If not, the agent may not be able to carry out the particular task because the third party presented with the power of attorney may refuse to honor it.

Over the years, I have reviewed many powers of attorneys drafted by other attorneys as well as ones obtained online and completed without the assistance of an attorney.  While the length of the document (ie. the number of pages) by itself doesn’t determine the strength of the document, a one or two page POA is often problematic simply because it probably does not set forth very many powers given to the agent.  In fact, it may only contain banking powers and a general statement that “the agent can do anything the principal can do”.  

We have seen in our office many scenarios where a POA of this type will be insufficient.  In that case a new POA must be drafted if possible and if it cannot, because the client no longer has capacity, a guardianship proceeding must be initiated.  Next week I’ll tell you exactly what I mean.