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What are the limitations of a power of attorney?

On Behalf of | Aug 22, 2023 | blog, Estate Planning

Individuals often seek to ensure their personal and financial matters remain in trusted hands, especially when they cannot handle them personally. A power of attorney is a legal document that allows someone (the principal) to grant another person (the agent) the authority to act on their behalf.

However, while this document provides significant power, it is important to understand its limitations so you can make informed decisions and safeguard your interests and those of your loved ones.

Type of authority granted

A power of attorney does not provide blanket authority. The principal dictates the scope. This means that if you grant someone a POA, they can only act within the boundaries you have set. If the document only specifies managing bank accounts, the agent cannot also decide on medical treatments for you. Chapter 765 of the Florida Statutes allows you to create a durable power of attorney as part of your healthcare advance directives.

A standard power of attorney is void if the principal becomes mentally incompetent. A durable power of attorney will stay in effect even if the principal loses mental capacity. However, all POAs, whether standard or durable, become invalid when the principal dies.

Obedience to the wishes of the principal

Even after granting a power of attorney, the principal retains the right to make decisions. An agent must not and cannot act against the known wishes of the principal. For instance, if you have communicated specific wishes about a property sale, the agent must honor those wishes even if they disagree.

Nontransferable power

In Florida, the agent cannot delegate the powers given to them to another party unless the POA document specifically allows it. This limitation ensures that the authority remains with the trusted individual you chose.

Fiduciary duty

The agent acts under a fiduciary duty, which means they must act in the best interest of the principal. They cannot use the power of attorney for their personal gain or in any way that might harm or go against the interests of the principal.

By knowing the limitations of a power of attorney, you can grant authority with clarity and confidence, ensuring that your interests remain protected and honored, even when you cannot make decisions personally.