Trusts and Estates

Interpreting the Language of a Power of Attorney

When you create a power of attorney (POA), you, the principal, give another person, known as an agent or "attorney in fact," the authority to act as your representative in legal and business matters. Once the POA is effective, your agent must obey your written wishes and has no leeway decide what you meant other than what you include in that document. For this reason, take time to ensure that your POA can be interpreted as you intend it to be.

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Once the POA is in effect, then your agent must obey your written wishes. He or she has no leeway to decide that you actually meant something different than what you wrote on the paper. For this reason, it's important to spend some time reviewing the power of attorney, and making sure that your agent will interpret the document as you intended it to be interpreted.

Tips to Avoid Misinterpretation

Be very specific about the type of powers you're giving the agent. They can be limited or broad, but ensure that you spell out they entail. You can have more than one agent and you don't want them arguing about what you meant so clarify what roles each are supposed to do, such as one person to manage your legal and financial affairs and the other person handles all household affairs.

Also your agent should be a family member, friend or professional whose beliefs are similar to your own. If you strongly believe in alternative health remedies, herbs and acupuncture, you probably don't want to give your health care power of attorney to someone who has a very different approach to medical problems.

If You're Named as an Agent

As an agent, it's your responsibility to interpret the wishes of the principal as outlined in the POA. It should list your specific rights, duties and responsibilities. The POA should also list the specific states laws that govern the document.

Ideally, you should read and review the document with the principal and possibly their attorney before it goes into effect. Ask questions if something's unclear and make sure you understand the principal's wishes.

You must be careful not to overstep the bounds of what the POA asks the agent to do. If your actions are called into question, you may be liable for any damages you caused and may also be subject to criminal prosecution. Also be sure you're comfortable with the activities the principal is asking you to perform. You don't want to end up doing something against your ethics or is illegal.

Each state has laws that detail the specific areas of authority for a POA. If, the POA has become effective, but there are questions about the agent's authority, or the validity of the power of attorney, then the agent must to look at the applicable state laws to interpret the POA's intent. Once this is done and there is still confusion or doubt about the intent of the POA, then the agent should consult the principal. If the principal is unavailable or unable to clarify the confusion, then the agent must consult a lawyer for assistance.

Question For Your Attorney

  • How do I create a power of attorney?
  • Given my circumstances, should I make a power of attorney?
  • I am an agent, how do I ensure that I don't get sued for carrying out the wishes of principal?
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