What is POA and who is entitled to one?

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What is POA and who is entitled to one?

A POA is simply a document giving someone permission to do something for you. It gives another person the legal authority to represent you. This is necessary when some third person is asked to rely on that authority.  Before drafting a POA, you should be familiar with the following terms:

Agent- The person who is given authority by a POA. 

Attorney-at-law- A person who is licensed to practice law before state or federal courts.

Attorney-in-fact- The person who is given authority by a POA.  This is another term for an agent. An attorney-in-fact does not have the power to represent anyone in the court or to give legal advice.

Execute- To sign a legal document, thereby making it effective.

Medical POA – A special kind of POA that gives the agent the authority to represent you on matters of your medical care. The agent has power only in the event the principal is mentally unable to make intelligent decisions or is unable to communicate his or her decisions

Limited POA- A POA that limits the agent’s authority to certain specific areas or actions.

Principal- The person who executes the POA, and thereby gives the agent the authority to act represent them.

Special POA for financial institutions- A POA limited to one or more accounts or safe deposit boxes at a single financial institution.

Springing POA- A POA that does not become effective until a certain event occurs, such as the incapacity of the principal.

Laws Concerning POA

The basics of the law concerning POA are fairly simple.  By signing a POA you are permitting another person to represent you. Your POA can give your agent broad powers, or it can limit him or her to specific actions.

The law provides that other people may rely on your POA in doing business with your agent, so you will be bound by what your agent does through the POA. This means that you had better have a great deal of trust in the person you select as your agent.



Under New York law, a person must have the “capacity to contract” to execute a POA as the principal. For most people, there

has never been a determination as to whether they can

contract or not. However, a determination that a principal or agent did

not have the capacity to contract will invalidate the POA.  By law, some persons cannot contract, e.g., minor.

Agent Selection

Be very careful about the selection of an agent. The agent may well have the power to financially ruin the principal. Simply appointing someone because they are “honest” is not enough.  Your agent must also be fiscally responsible and have the ability, and the inclination, to keep excellent financial records of their actions. Naming one of your children, simply because they are “family,” is not prudent. If the POA is durable, then you, as the principal, may not later have the capacity to even know that your agent is mishandling your estate. You should strongly consider naming multiple agents and requiring them to act jointly. You should also consider requiring prior approval of some acts of your agent by others you trust (e.g., family members).

Revocation of a POA

There are several ways of revoking a POA provided for by the New York state laws.  Under these provisions the agents’ authority terminates under the following circumstances:

where the document itself calls for the authority to end on a specific date. This is preferred when practical, as there is no confusion as to the termination of the agent’s authority

where the document calls for the power to terminate upon the happening of some event. For example, the power could terminate when the principal returns to the United States or is discharged from the military

Under express revocation—The principal, either orally or in writing, informs the agent or a third party that the power is revoked

under revocation by operation of law—The power is automatically

revoked, without any action being taken by the principal.

Examples of revocation by operation of law are the death of the

principal or agent, or the divorce of a principal and agent who

are husband and wife.

Frequently Asked Questions

What is a POA?

This is a document that gives the agent authority to represent you on matters stipulated in the document.

Who is an agent?

This is the person you give authority to represent you in a POA

What is a springing POA?

This is a POA that doesn’t come into effect until a certain event happens.

Why should you have a POA?

A POA is necessary to ensure that some are there to represent you even if you are incapacitated.

When can POA be revoked?

A POA can end if the principal was married and gets divorced or when the principal dies.

What is a medical POA?

This is a document that allows you to select an agent who will have authority over your medical care.

What do we mean by a principal?

This is the person who executes the POA by giving the agent authority to represent them.

DISCLAIMER: The information provided in this blog is for informational purposes only and should not be considered legal advice. The content of this blog may not reflect the most current legal developments. No attorney-client relationship is formed by reading this blog or contacting Morgan Legal Group.

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