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When does a power of attorney lose its authority?

On Behalf of | Apr 22, 2021 | Estate planning

There are circumstances in which you may not be able to handle your own affairs. A serious medical issue that leaves you unconscious, unable to communicate or otherwise incapacitated is a perfect example. In such a scenario, you become dependent on the actions and decisions of others.

If you have already created power of attorney documents at the time of your incapacitation, however, your preferences and wishes will still have support through the actions of others. Powers of attorney give a specific individual or sometimes multiple individuals the authority to act on behalf of someone else.

It is common for people to draft documents that give someone the power to handle financial transactions or make medical decisions on their behalf. Someone who runs a business may also have powers of attorney to help ensure the smooth continuity of business operations. The point of such documents is to pass authority on to those still capable of acting when you cannot. When might your documents lose their authority?

When the creator recovers

The most positive reason that powers of attorney lose their authority is that the person assigning that authority to others recovers. When someone regains consciousness or the ability to communicate, their power of attorney loses effect because they are now capable of managing things for themselves again.

When the creator of the documents dies

Powers of attorney are meant to help someone during a temporary incapacitation. While they may be part of an estate plan, powers of attorney do not continue to hold authority after someone dies. At that point, their last will and other estate planning documents will dictate what occurs.

When the creator experiences a permanent loss of testamentary capacity

Generally, power of attorney documents are only meant as a temporary stopgap for unusual circumstances. Depending on the language used when drafting powers of attorney, the documents may lose their authority when the person who created them loses their testamentary capacity.

Unless the documents have language intended to make them durable, meaning that their authority persists after permanent incapacitation, they may no longer hold legal power when medical experts or legal authorities determine that someone will not regain their testamentary capacity.

Thorough estate planning and the use of careful language in powers of attorney can help ensure that they suit the purpose for which someone creates them.