Being named as someone’s power of attorney is both an honor and a serious legal responsibility. This designation means that a person — called the “principal” — trusts you to act on their behalf in important financial, legal, or medical matters.
While the idea of stepping into this role might seem straightforward, many people are unsure exactly what a power of attorney can and cannot do. By understanding your duties and limitations, you can confidently fulfill your role while protecting your loved one’s wishes.
Understanding the Role of Power of Attorney
A power of attorney (POA) is a legal document that authorizes you to make decisions and take actions for someone else. The scope of your authority depends on the specific type of POA they have created:
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Financial Power of Attorney – Allows you to handle banking, investments, property transactions, bill payments, and other money-related matters.
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Medical Power of Attorney – Grants authority to make healthcare decisions if the principal is unable to communicate or make choices themselves.
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General Power of Attorney – Gives broad authority over financial and legal matters.
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Limited or Special Power of Attorney – Authorizes you to act for specific tasks or within a set time frame.
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Durable Power of Attorney – Remains effective even if the principal becomes incapacitated.
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Springing Power of Attorney – Only goes into effect once a specific condition (like medical incapacity) is met.
Knowing which type you hold is essential to ensuring you act within the boundaries of your authority.
Your Core Responsibilities
As a power of attorney, you are legally obligated to act in the principal’s best interests and to follow any instructions they’ve provided. Your duties may include:
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Managing and monitoring bank accounts.
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Paying bills, taxes, and debts on time.
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Handling investments and property transactions.
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Signing contracts or legal documents on behalf of the principal.
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Coordinating with healthcare providers to follow medical wishes.
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Keeping thorough and accurate financial records.
Fiduciary Duty: Acting in the Principal’s Best Interests
Your role as a power of attorney comes with a fiduciary duty — a legal requirement to make decisions that benefit the principal, not yourself. This means:
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Avoiding conflicts of interest — You cannot make decisions for personal gain.
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Following instructions — If the principal has provided specific wishes in writing, you must honor them.
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Keeping records — Document all transactions, decisions, and communications related to your role.
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Maintaining confidentiality — Protect the principal’s private information at all times.
If you are unsure about a decision, it’s better to pause and seek guidance than to risk overstepping your authority.
When the Role Begins and Ends
A power of attorney does not give you permanent control over someone’s affairs. It typically begins:
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Immediately, if the POA specifies so, or
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Upon a specific event, such as a doctor confirming incapacity (for a springing POA).
It ends when:
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The principal revokes it.
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The principal passes away.
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A court invalidates the POA.
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The purpose or time frame outlined in the POA is fulfilled.
Common Mistakes to Avoid
Even with the best intentions, it’s easy to make mistakes that could harm the principal or create legal issues. Some common missteps include:
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Mixing your personal finances with the principal’s accounts.
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Failing to keep receipts and transaction records.
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Making decisions outside your granted authority.
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Delaying important payments or healthcare decisions.
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Ignoring the need to communicate with the principal’s family or other appointed agents.
When to Seek Professional Guidance
Serving as a power of attorney can be straightforward in some cases, but complex in others — especially if the principal’s finances are extensive, their healthcare needs are complicated, or there are family disagreements.
An experienced estate planning attorney can help you:
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Interpret the POA document.
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Clarify your legal obligations.
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Navigate difficult or disputed decisions.
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Coordinate with other parts of the principal’s estate plan.
Why Proper Planning Matters
A power of attorney is only effective if the document is clear, legally valid, and tailored to the principal’s needs. Poorly written or outdated POA documents can leave gaps in authority, cause delays, or even be challenged in court.
At Ozarks Legacy Law, we help families create well-structured POAs as part of a complete estate plan, ensuring that the person chosen to act has clear instructions and the legal authority to protect the principal’s interests.
Serving as a power of attorney is a significant commitment that requires diligence, integrity, and a clear understanding of the role. By staying within the scope of your authority, keeping detailed records, and acting in the principal’s best interests, you can honor the trust placed in you and protect your loved one’s legacy.
Contact Ozarks Legacy Law today to schedule your free planning session and ensure your power of attorney documents are clear, enforceable, and designed to protect your family’s future.
