Things you can and cannot do with a power of attorney

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Things you can and cannot do with a power of attorney

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Creating a Power of Attorney is an important yet intimidating part of estate planning. No one wants to imagine themselves incapable of making decisions regarding their own lives anymore, but that is exactly what the power of attorney ensures. 

What is Power of attorney?

A Power of Attorney is a legal authorization that allows an individual to nominate someone they trust to manage and make decisions regarding their financial, medical and property-related affairs once they are incapable of doing so. 

(For better understanding, the terms “Agent” and “Principal” are being used. The principal is the one who nominates. The agent is the one who becomes responsible after the principal becomes incapable).

The two main types of power of attorney are Medical and Financial. A Medical Power of Attorney allows the agent to make decisions regarding the care and treatment that the principal is receiving. A Financial Power of Attorney allows the agent to take all financial decisions, including property, estate matters once the principal is incapable of doing so themselves. 

What you can or cannot do as an agent depends on how it has been written. The principal can draft the power of attorney to be generic or very specific, depending on the need. 

What can a power of attorney do?

Medical: In case of a medical power of attorney, the agent can decide –

  • What health care the principal receives, which includes hospitalization and hospital care, surgery, home health care and more. 
  • The principal’s long time living arrangement. That includes assisted living facilities, nursing homes, hospice, etc.
  •  the care providers and doctors for the principal. 
  • what food the principal consumes.
  • who bathes the principal. 


Financial: In case of a financial power of attorney, the agent can-

  • Have access to the bank accounts of the principal. The accounts can be used to pay for medical, housing and other bills. 
  • File taxes on the behalf of the principal.
  • Open bank accounts, write checks and sell property on behalf of the principal.
  • Collect the principal’s debts. 
  • make business or finance-related decisions. 
  • open a lawsuit for the principal and can sign legal documents on the behalf of the principal.
  • purchase life insurance policies for the principal

What a power of attorney cannot do?

A generic Power of Attorney doesn’t contain a lot of limitations, but there are still some things that the agent is not allowed to do. Some of them being- 

  • The agent is not allowed to change the Will of the principal
  • The Power of Attorney cannot transfer the responsibility to another agent.
  • After the death of the principal, the Executor of the estate takes over. The Power of Attorney cannot make any further legal, financial or medical decisions (The POA ends with the death of the principal).
  • The Power of Attorney cannot work against the principal’s best interest 
  • The Power of Attorney can not use the money and assets of the principal as their own 
  • The nominated Power of Attorney needs to be of sound mind and body to be appointed as one.

Navigating the process of estate planning can be confusing and complicated. Understanding what the Power of Attorney can or cannot do helps clarify doubts and allows you to make a well-informed decision in the best of your interest.

Making arrangements for what must happen to your Digital Assets when you can no longer handle them on your own is as important as planning for your physical or tangible assets. Clocr provides Digital Estate and Digital Legacy solutions. Sign up with Clocr today and get all the help you need in creating your Digital Estate or Digital Legacy Plan.