08 Apr How Much Authority Does a Power of Attorney Have?

A power of attorney (POA) is a legal document that lets you give someone you trust the authority to make decisions on your behalf. But how much authority does a power of attorney actually have? That depends on the type of POA, what’s written in the document, and the laws in your state. If you’re thinking about setting up a POA or you’ve been named as one, it’s important to understand what someone in this role can and can’t do. 

Types of Power of Attorney

General vs. Durable Power of Attorney

A general power of attorney grants broad authority over financial, business, and legal matters. Your agent can manage bank accounts, sign contracts, and oversee business dealings on your behalf. However, this power ends if you become incapacitated, which can leave important matters up in the air if no backup plan is in place. 

A durable power of attorney, however, remains in place even if you can no longer make decisions for yourself. That’s why it’s such a key part of long-term estate planning—it ensures that someone you trust can step in to handle financial or medical matters if you are ever incapacitated. Without a durable POA, your loved ones might have to go through a long and expensive court process to gain the authority to make decisions for you.

Limited vs. Parental Power of Attorney

A limited power of attorney is temporary, and only applies to specific tasks, such as selling a home or managing a single financial matter. For example, if you’re overseas and need a family member to sell your property, a limited POA can give them the authority to do just that.

A parental power of attorney allows a parent to temporarily grant their parental decision-making power to another trusted adult. This can be useful during extended travel, military deployment, or medical emergencies when a parent isn’t available to make decisions themselves. However, this authority is temporary and is not the same as legal guardianship.

Power of Attorney vs. Conservatorship

A power of attorney is something you create voluntarily, while you are mentally competent. This means you get to choose your agent and define their powers. You can also revoke a power of attorney at any time.

A conservatorship, on the other hand, is based on a court decision. When someone is no longer able to manage their own affairs, and they didn’t set up a durable power of attorney in advance, the court can appoint a conservator. This person usually has a broader legal responsibility and must report their decisions to the court. Establishing a POA in advance can help avoid the stress, cost, and potential complications of a court-appointed conservatorship.

The Powers and Limitations of a POA

What a Power of Attorney Can Do

Depending on the type of POA, an agent may be authorized to handle a variety of responsibilities, including:

• Financial transactions – They will have legal access to your bank accounts and be able to do things like deposit checks and transfer funds.
  
• Pay bills and taxes – Granting this ability will ensure that financial obligations like mortgage payments are made on time.
• Buy or sell real estate – If you choose, your agent can sign contracts and handle real estate transactions.
• Make medical decisions – If designated in a healthcare POA, the agent can make medical treatment choices.
• Oversee business operations – You can allow your agent to manage business affairs, sign agreements, and make executive decisions.

See a full list of POA powers. 

What a Power of Attorney Cannot Do

Even with broad authority, a POA has limits. An agent cannot:

• Change or override the principal’s will – Estate planning decisions remain solely with the principal. 
• Make decisions after the principal’s death – A POA becomes void once the principal passes and the executor of the will takes over.
• Transfer their authority to someone else – The agent cannot delegate their role to another person.
• Act against the principal’s best interests – All actions must be made in the principal’s favor. Misuse of power can result in legal consequences.

Explore the full list of POA restrictions here. 

Can a Power of Attorney Change a Will?

One of the biggest misconceptions about a POA is that an agent can alter a will. That’s simply not true. Only you, as the principal, can make changes. If your will needs to be updated, the best thing to do is meet with an estate planning attorney to make the adjustments. If you’re no longer mentally competent, your existing will remains in effect.

How to Change a Power of Attorney

If you ever need to update or revoke a POA document, you need to:

• Draft a written revocation – This legally cancels the previous POA.
• Notify all relevant parties – Banks, healthcare providers, and any institutions that relied on the POA must be informed.
• Create a new POA – If you’re replacing an old POA, a new document should be drafted and signed according to state laws.

It’s a good idea to review your POA documents regularly, especially if you’ve had major life changes such as marriage, divorce, or changes in health. Keeping your POA up to date will ensure that the right person is always in charge. 

Secure Your Family’s Future with Estate Planning

Appointing a durable power of attorney can help ensure that your affairs will be handled according to your wishes, if you’re ever unable to make medical or financial decisions yourself. Taking this step can provide peace of mind, but a POA only works when it’s set up correctly. 

At Phelps LaClair, we’ve been assisting families with their estate planning needs for decades. We want to ensure that your wishes are honored and your loved ones are protected. Whether you’re drafting a new POA or making changes to an existing document, we can guide you through the process with expertise and care. Contact us to schedule a consultation, so we can answer all of your questions about power of attorney in person. 

Images used under creative commons license – commercial use (04/08/25). Photo by Cottonbro Studio on Pexels.