Power of Attorney Obligations

By Marie Murdock

A person who creates a power of attorney, known as the principal, typically appoints someone she fully and completely trusts to act as her agent, or attorney-in-fact. The authority granted under a power of attorney often allows the agent to perform actions that, absent a power of attorney, only the principal herself can perform. Therefore, the agent has a fiduciary responsibility to act for the benefit of and in the best interest of the principal.

Scope of Duties

General powers of attorney are broad in nature, specifying the general actions an agent may perform on behalf of the principal, for example, to act on principal's behalf in all financial matters. Specific powers of attorney authorize a specific action and/or pertain to a particular event, such as selling a parcel of land or a vehicle. An agent has an obligation to the principal to act only within the powers granted by the power of attorney. Powers of attorney are governed by state law.

Transact Business

A principal usually appoints an agent to act for her because she is, or will be, unavailable or unable to act for herself. The agent has an obligation to be available and willing to act according to the principal’s instructions when needed.

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Mental Incompetence

If the power of attorney is durable, it specifies that an agent may continue to act if the principal becomes mentally incompetent. Once the principal is declared incompetent, the agent may be unable to verbally confirm the principal’s instructions or intentions. Thus, she must make decisions she feels are in the best interest of the principal based on the current situation.

Resignation or Withdrawal

An agent has an obligation to the principal to withdraw if she in unable or unwilling to perform her duties in the manner expected by the principal. If illness, family emergency or other obligation prevents the agent from acting or carrying out her duties in a responsible manner, she should withdraw and allow a named alternate agent to act in her place. The withdrawing agent, however, will be responsible for turning over necessary information to the successor as well as provide notice of the withdrawal to interested parties.

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Power of Attorney Rights & Responsibilities


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Can a Person Give or Turn Over Her Power of Attorney to Someone Else?

Although a power of attorney involves two persons, it is not a contract and can be unilaterally revoked. The person making the document, termed the principal, uses the power of attorney to name an agent to act for her. A competent principal is free to revoke that authority at any time and confer it on another agent. The person named as agent can also decline to serve but cannot give or transfer her authority under the power of attorney to another.

How to Determine a Misuse of Power of Attorney

There is a significant danger to an agent misusing his power of attorney because it may be hard to observe. The power of attorney grants the agent power to act in a principal’s name in the principal’s absence. This means that the agent might be able to transfer the principal’s property and enter the principal into binding agreements with minimal oversight by the principal. Powers of attorney are subject to state law, so rules may vary. However there is a general process you can follow to determine whether a power of attorney has been misused.

Can a Power of Attorney Charge Expenses?

When you are unable or unavailable to accomplish certain tasks, such as accessing your bank accounts, you may need an agent to act for you. A power of attorney is the document that gives your agent this authority, and it usually provides for reimbursement for reasonable expenses. State laws vary on the types of expenses for which an agent can be reimbursed, but you often can adapt these rules to fit your situation.

Power of Attorney

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