10 Power of Attorney Myths That Could Ruin Your End-of-Life Plans

Power of attorney (POA) is an important element when making what-if end-of-life plans. The simplest definition is that a POA gives someone (the agent) the right to act on your (the principal) behalf. It dictates who you are authorizing, what scope of tasks you are allowing them to perform, and under what conditions you are giving them power to do so. For the document to be valid, you must be of sound mind and acting on your own accord when signing off.

For many, this legal document can be intimidating and confusing, which often can lead to abuse and theft. A couple days ago we spoke at a conference where a participant informed us that her mother’s brother embezzled thousands of dollars when he was acting as her POA while she was sick and incapacitated, which created a huge mess when trying to settle her mom’s estate after she died.

To help define in even more detail what a POA is and isn’t, following are the top ten common myths and misunderstandings:

Myth #1: A power of attorney remains valid after the principal dies.

Fact: A POA ends upon the death of the principal. At that point, only a will or living trust can determine how affairs are managed.

Myth #2: The agent can do anything they want with the principal’s finances.

Fact: The agent can only perform the acts defined in the POA when the conditions outlined in the POA are met. The agent must also act in the best interest of the principal, following legal and ethical obligations.

Myth #3: You only need one power of attorney for everything.

Fact: Different types of POAs exist for specific purposes, like medical, financial, or special circumstances. It’s common to have more than one.

Myth #4: A general power of attorney is enough if you become incapacitated.

Fact: A general POA becomes invalid if the principal is incapacitated. A durable POA, which contains specific language that says the authority “endures” incapacitation is required to retain authority in such situations.

Myth #5: The power of attorney I create on my own without professional help is always valid.

Fact: While online templates exist, we recommend consulting with an attorney. Improper wording or not following legal procedures can make the POA invalid or create issues.

Myth #6: Once I appoint an agent, I can’t change it.

Fact: You can revoke or change your POA anytime, as long as you are of sound mind, by creating a new document and informing all parties involved.

Myth #7: A power of attorney always gives the agent immediate authority.

Fact: Unless otherwise noted in the POA, authority only begins when the principal becomes incapacitated or meets specific conditions (like a "springing" POA).

Myth #8: My spouse automatically has power of attorney if I’m incapacitated.

Fact: Unless legally designated, spouses don’t automatically have POA. A separate document is required to give them this authority.

Myth #9: A power of attorney is only for the elderly.

Fact: POAs are essential for people of all ages, especially in situations like military deployment, travel, sudden illness, or accidents.

Myth #10: An agent can change the principal’s will.

Fact: A POA does not grant the agent power to alter the principal’s will or manage their estate after death.

ACTION ITEMS:

Decide who you would like to make medical decisions and pay your bills on your behalf if you become incapacitated. It does not have to be the same person.

Talk to that person to confirm their willingness.

Find an attorney to assist you in drafting the appropriate documents for your end-of-life plan.

Cheers!

Corey

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Also, don’t forget to check out our free downloads (https://www.affairsinorder.com/free-downloads) to help in your personal end-of-life planning.

Cheers!

Corey

P.S. Don’t forget to check out our free downloads (https://www.affairsinorder.com/free-downloads) to help in your personal end-of-life planning.