What Should You Know Before Giving Someone Power of Attorney?

Before giving someone power of attorney, you should understand exactly what authority you are granting, when that authority begins, and how long it can remain in effect. You should also choose an agent you trust and make sure the document matches your wishes.

A power of attorney can be useful for managing finances, property, or other affairs when you cannot act yourself, but it also gives another person significant legal authority. Understanding durable power of attorney vs power of attorney can help you decide what type of document best fits your circumstances.

Understand What Power of Attorney Means

A power of attorney is a legal document that allows one person, called the principal, to authorize another person, called the agent, to act on their behalf.

The authority can involve financial transactions, real estate, banking, business matters, or other responsibilities. The exact powers depend on the document and the law of the state where it is created or used.

Giving someone power of attorney does not necessarily mean giving that person unlimited control. You can often define the specific powers the agent receives.

Know the Difference Between Durable and Non-Durable Powers

One of the most important decisions involves whether the power of attorney should be durable.

A durable power of attorney generally continues even if the principal becomes incapacitated. This can make it an important part of an incapacity and estate plan because the agent may still be able to manage certain affairs when the principal cannot make decisions independently.

A non-durable power of attorney may end when the principal becomes incapacitated or when another event specified by law or the document occurs.

The appropriate choice depends on what you want the document to accomplish and the law governing it.

Choose Your Agent Carefully

The person you appoint may be able to access accounts, manage property, handle financial transactions, or make other decisions within the authority granted.

For that reason, choosing an agent requires more than simply selecting a close relative. Consider whether the person is responsible, trustworthy, organized, and capable of handling the duties involved.

You may also want to name a successor agent. This provides an alternative if your first choice cannot or will not serve.

Decide How Much Authority to Give

You should carefully review the powers included in the document before signing it.

Some people need broad authority because they want an agent to manage most financial matters if they become unable to do so. Others may only want someone to handle a specific transaction or limited responsibility.

Certain powers may need to be expressly granted under applicable law. A generic form may therefore provide more or less authority than you intended.

Know When the Document Becomes Effective

Another important question is when the agent can begin acting.

Some powers of attorney become effective when properly executed. Others may be written to become effective later or after a specified event occurs.

For example, Washington law addresses when a power of attorney becomes effective under RCW 11.125.090. Unless the document provides otherwise, the statute generally provides that a power of attorney becomes effective when executed.

Understanding this timing can help prevent confusion about when an agent actually has authority to act.

Follow the Required Signing Rules

A power of attorney must be properly executed to be legally effective. Requirements vary by state and may include notarization or witnesses.

For example, RCW 11.125.050 establishes execution requirements for powers of attorney in Washington, including signing and acknowledgment or qualified witness requirements.

Failing to follow the applicable formalities can create problems when an agent later attempts to use the document with a bank, government agency, or other organization.

Understand How the Power of Attorney Ends

A power of attorney does not necessarily remain in effect forever. It may end because the principal revokes it, the principal dies, the document reaches its stated expiration, or another legally recognized event occurs.

Washington law also addresses termination under RCW 11.125.100.

If you decide that you no longer want someone to act as your agent, you should properly revoke the document and notify relevant institutions when appropriate.

Review Your Document Regularly

Your circumstances can change after you create a power of attorney. The person you originally selected may move away, become unavailable, or no longer be the right person to manage your affairs.

Marriage, divorce, changes in financial circumstances, new property, or changes to your overall estate plan may also make an update necessary.

Reviewing the document periodically helps ensure that the authority you granted still reflects your current wishes.