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A power of attorney allows you to appoint someone to handle financial or legal matters on your behalf. An agent may be able to pay bills, manage accounts, handle property, file taxes, and take other actions authorized by the document. However, a power of attorney does not give unlimited control. The agent must follow the document, act in your best interests, and avoid using the role for personal gain.
What Can an Agent Under a Power of Attorney Do?
An agent’s authority depends on the language of the document. Some powers of attorney are broad, while others are limited to specific transactions or accounts.
A financial power of attorney may allow an agent to:
- Pay bills and manage bank accounts
- Deposit checks and collect income
- Handle investments and retirement accounts
- Buy, sell, or manage real estate
- File tax returns
- Communicate with financial institutions
- Manage business interests
- Sign contracts or legal documents on your behalf
The agent can only do what the document allows. If a power is not included, the agent should not assume they have it.
What Duties Does an Agent Under a POA Have?
An agent under a power of attorney is a fiduciary. This means the agent must act honestly, carefully, and in your best interests.
The agent should keep your money and property separate from their own, maintain clear records, follow your known instructions, and avoid conflicts of interest. If an agent misuses funds or acts outside the authority granted, they may be held financially responsible for the harm caused.
Fiduciary duty is what separates lawful help from misuse of authority. The agent is not free to manage your assets as if they own them.
What Can an Agent Not Do?
A power of attorney has limits. Unless the document clearly allows it, an agent generally cannot:
- Use your money for personal expenses
- Transfer your assets to themselves
- Make gifts using your assets
- Change your will or trust
- Change beneficiary designations
- Vote for you
- Make medical decisions
- Act after your death
- Take actions outside the authority granted in the document
Self-dealing is one of the most serious concerns. For example, an agent who moves your money into their own account without proper authority may be violating their fiduciary duty. Even when gifts or transfers are allowed, the agent must act consistently with your wishes and the document’s terms.
When Does a Power of Attorney Begin?
Some powers of attorney take effect as soon as they are signed. This can be useful if you want someone to help with financial or legal matters right away.
Others are drafted as “springing” powers of attorney, meaning the agent’s authority begins only after a specific event occurs, such as incapacity. The document should explain how that event is determined.
It is also important to understand whether a power of attorney is durable. A durable power of attorney remains effective if you become incapacitated, while a non-durable power of attorney generally ends upon incapacity. Because many estate planning documents are intended to help manage affairs during periods of incapacity, durable powers of attorney are commonly used in estate plans.
The right approach depends on your goals, your level of trust in the agent, and whether you want immediate help or future protection.
When Does an Agent’s Authority End?
An agent’s authority does not last forever. A power of attorney may end when:
- You revoke the document
- You pass away
- A court invalidates the document
- The POA expires
- The stated purpose of the POA has been completed
A common misunderstanding is that a power of attorney continues after death. It does not. Once the principal dies, the agent’s authority ends. At that point, the personal representative named in the estate plan or appointed by the probate court handles estate matters.
An agent should not continue paying bills, managing accounts, or transferring property under a power of attorney after death.
How Should You Choose an Agent?
The person you name should be trustworthy, organized, and willing to serve. They should understand that the role comes with responsibility, not ownership.
Many people choose a spouse, adult child, relative, or close friend. The best choice depends on your family dynamics, assets, and planning goals. In some situations, naming a backup agent can also help prevent delays if your first choice cannot serve.
Make Sure Your POA Matches Your Goals
A power of attorney can be a valuable planning tool, but only when it is clear, properly drafted, and tailored to your needs. The document should give your agent enough authority to help while also reflecting the limits you want in place.
At The Law Offices of Patricia Bloom-McDonald, we help individuals and families throughout Massachusetts prepare powers of attorney and other estate planning documents that support their long-term goals. Contact us to discuss your estate planning options.