There are a great many advantages to creating a power of attorney. It is a legal document with which you can give someone you trust the authority to act on your behalf in many different situations. The most common uses of this estate planning tool are for managing someone’s financial matters or health care decisions.
Even with all of its advantages, you should give careful consideration to the use of a power of attorney, as your agent will ultimately have full legal authority to act for you. Therefore, it is critical that you select someone you believe is honest and trustworthy; someone whom you are confident will only act in your best interest.
Agents are not subject to direct oversight
The reality is, you do not have immediate control over your agent’s actions because he or she will have the authority to enter into transactions on your behalf without you being present. Though an agent is required to follow your instructions, it is always possible for the agent to make mistakes, or, even worse, use the authority to defraud you.
For instance, if your agent has the authority to withdraw funds from your bank accounts, he or she could mistakenly withdraw from the wrong account. Unfortunately, your agent could also withdraw money without your permission. The bank will not be held responsible for the impermissible withdrawal, as long as the power of attorney the agent was acting under is valid.
Notice of revocation is required for all third-parties
Revoking a power of attorney is not difficult. It only requires a written statement that the authority given by the document is being revoked. The complication comes in providing notice of the revocation to all necessary parties. Any third parties, such as banks and other entities with whom your power of attorney has been used, must be notified individually. If this step is not taken, a bank or mortgage company for example, will still continue to deal with your agent as it always has. Without proper notice that the power of authority has been revoked, your agent could potentially continue to act on your behalf at that institution. Again, because the bank would have no way of knowing that your agent actually no longer has authority to do so, the bank could not be held liable for any unauthorized transactions in that situation.
If you have questions regarding a power of attorney, or any other estate planning needs, please contact Wilcox Attorneys, PA, online or by calling us at (479) 443-0062.
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