Power of Attorney Rights & Responsibilities

By Anna Assad

Both the giver and receiver of powers under a power of attorney have rights and responsibilities. The giver, usually called a principal, uses a power of attorney to allow the receiver, called an attorney-in-fact, or agent, to act for her. An attorney-in-fact can receive authority in a number of the principal's affairs, including financial transactions, real estate matters and even gift giving. An attorney-in-fact and principal should be aware of each others rights and responsibilities to avoid mistakes and confusion.

Principal Rights

A principal can grant broad powers or limited powers to her agent -- she has the right to restrict these powers on the power of attorney at the time of creation. She also keeps the right to make her own decisions while she's able to do so. The principal decides if the powers go into effect immediately, or only if she can't make her own decisions because of incapacitation. The principal can also revoke the power of attorney at any time.

Agent Rights

A proposed agent has the right to decline to act as an agent, and a current agent has the right to resign for any reason. An agent who wants to resign should let the principal know in writing. If he's in the middle of a transaction for the principal, he might be held liable for losses if he doesn't finish the deal. An agent can charge for his services as long as the power of attorney doesn't state otherwise. The fee must be reasonable for the area and the service provided. Most states require the agent request the compensation in writing within a certain number of months after acting. For example, an agent in Indiana must ask for compensation within 12 months of performing the action.

Ready to appoint a power of attorney? Get Started Now

Principal Responsibilities

A principal must advise the agent of her decisions when she asks him to act on her behalf. Her instructions must be clear. If she's vague, the agent might not be held responsible for her losses in court if he makes a mistake. The principal must notify the attorney-in-fact and other persons or businesses that have the power of attorney on file, such as banks, if the powers are revoked. If she fails to follow through on this obligation when she ends the powers, the attorney-in-fact and other parties might not be liable for actions that occur after the revocation date.

Attorney-in-Fact Responsibilities

The attorney-in-fact is responsible for carrying out the powers honestly and according to the principal's wishes. She must not use the power of attorney for anything other than what the document allows and notify the principal when she completes actions on her behalf. An attorney-in-fact should keep a written log of her activity on behalf of the principal to protect herself legally; the court or the principal can ask her to account for her actions at any time. The principal typically makes decisions and the attorney-in-fact carries them out. Some actions, such as signing the principal's will, are not allowed under most state laws, even if the document gives the attorney-in-fact power in that area. An attorney-in-fact should check state laws regarding powers to make sure she's taking an illegal action because she is responsible for knowing what she's allowed to do.

Ready to appoint a power of attorney? Get Started Now
Power of Attorney Obligations
 

References

Related articles

Does a Durable Power of Attorney Grant the Right to Deny Visitors to a Patient?

An agent under a durable medical power of attorney has authority to act on behalf of an incapacitated principal to make decisions within the scope of the power assigned. Generally, an agent is given broad authority to decide all medical and health matters. The right to allow or reject visitors on behalf of the principal is generally a part of the agent's authority unless specifically excepted in the power of attorney.

Laws for Power of Attorney in New Hampshire

New Hampshire financial power of attorney laws set forth the rules and limitations under which a person, known as the principal, may grant authority to another person, known as the agent, to act on their behalf. The agent acting for the principal can do whatever the principal has allowed her to do, as outlined in the power of attorney document. In New Hampshire, an agent may have broad authority that includes signing the principal's real estate deal papers and completing the principal's banking.

Can a Power of Attorney Give Away a Life Estate?

A power of attorney is a written document wherein a principal grants an agent the power to take action on the principal’s behalf. Powers of attorney are often granted because the principal wants to take a specific action but cannot do it personally for some reason. What an agent can and cannot do is defined in the power of attorney document. A power of attorney can grant an agent the ability to give away a life estate specifically or the right to distribute a principal’s property subject to whatever terms the agent sees fit. However, the power of attorney may limit the circumstances in which an agent can use his power.

Related articles

What Are the Duties of Power of Attorney?

A power of attorney is a legal document that allows one person to act for another person, but the authority comes with ...

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 ...

Penalty for Taking Advantage of Power of Attorney

A power of attorney is a legal status given to an agent by a principal. Under a power of attorney, an agent is able to ...

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 ...

Browse by category
Ready to Begin? GET STARTED