What Are the Disadvantages of Using a Power of Attorney?

By Anna Assad

While a power of attorney can be useful, you should consider some of the disadvantages of giving another person authority to act on your behalf. Giving power of attorney to a person you trust allows her to engage in actions and complete transactions for you. Your agent may do whatever you authorize her to do through your power of attorney document, including your banking transactions.

No Direct Oversight

Your agent should follow your directions when acting on your behalf, but she might make mistakes or even commit fraud using her authority. An agent uses a power of attorney to take actions for you when you're not present, so you don't have immediate control over what she does. For example, you may ask your agent to withdraw money from one of your accounts. As your agent, she has authority to bank for you in general; thus, she might accidentally take money from the wrong account and overdraw it. Even worse, she may take money from your accounts without your permission. As long as the power of attorney is valid, you can't hold your bank responsible for what your agent does, unintentionally or on purpose.

Lack of Recognition

A third party, such as a bank or mortgage lender, may not accept the power of attorney, which doesn't help you if you need your agent to complete a transaction. While third parties should accept a power of attorney that meets the legal standards of the state you're using it in, some third parties require them to also meet their internal standards or policies for such documents. If your power of attorney doesn't meet these internal standards, you may have trouble using it at that institution.

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Revoking a power of attorney ends your agent's authority. Revocation rules vary by state. In general, if you want to revoke your agent's authority, you must present the revocation to every third party you've used the power of attorney with. If you don't, your agent may continue to act for you and the third parties may not be liable for any financial loss you suffer as a result. Missing a third party or failing to present the revocation quickly enough, especially if your agent has been stealing from you, may have disastrous consequences.


You may create disadvantages to your power of attorney by making drafting mistakes, such as picking the wrong form. If you want your power of attorney to continue after you become incapacitated, for example, you need to use a durable power of attorney or include wording that indicates authority continues if you're unable to make your own decisions. If you don't, your agent won't have any authority to act for you if you're incapacitated, and your family may need to have a guardian appointed for you.

After Death

Your power of attorney doesn't continue after you die. To designate a person to handle your property after your death, you will need to create an estate plan, such as a will or trust, granting them authority to do so.

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