What is a power of attorney, and how does it work?

The following information was discussed by Attorney Whitney Hughes on the May 22, 2007 edition of Legal Briefs on KDKA's Pittsburgh Today Live Show.

What is a Power of Attorney (POA) and what does it do?

A Power of Attorney is a legal document in which the person drafting it gives to an agent the power to act on his/her behalf with respect to certain transactions and also creates certain rights and responsibilities. By giving someone Power of Attorney, you are essentially allowing him/her to stand in your shoes and act as you would with respect to certain decisions and transactions.

Do I really need a Power of Attorney, and if so, can't I just do it myself?

Many times people assume that a Power of Attorney is considered only when talking about estate planning or dealing with elder care issues. That is not the case. While most people will draft POAs when doing an estate plan, they can also be drafted when planning a vacation in which your minor child is out of your custody. If the child needs medical care while you are away, you will need to give the person who is caring for your child the authority to take him/her to a hospital and have medical treatment rendered. A Power of Attorney will do just that. In addition, assume that you are a service member who is about to be deployed. Again, giving someone Power of Attorney to handle your affairs while you are gone ensures that you may not face adverse actions or decisions being made in your absence.

The decision whether or not to hire an attorney to assist you in drafting a Power of Attorney is one you have to make very carefully. While there are "do it yourself" kits available, these are usually general Powers of Attorney and are not specific to your legal needs. Keep in mind that the more specific you are when drafting any document, the less room there is for mistakes. POAs can be limited to a transaction or a set of transactions. They can also be limited with respect to dates and lengths of time. To make sure you have a document which meets your exact needs, it is always best to speak with an attorney.

What do I do if someone given Power of Attorney is now not acting appropriately?

Powers of Attorney come with a tremendous responsibility. The agent must act as the person would have in the same circumstances. He/she must also keep all of his/her assets separate from those of the person for whom he/she holds the POA.

Pennsylvania has an Elder Abuse Hotline where you are able to make a complaint if a loved one is being financially abused. Call 1-800-490-8505 to file a complaint.

In addition, POAs can be revoked by drafting a document to do so. This is a situation in which an attorney will need to be consulted.

I'm hearing so much about Powers of Attorney lately, why are they making the news so often?

Many people are using POAs when dealing with elder care issues, and while many times they work well, sadly there are instances when they are abused. These unfortunate stories often make headlines.

In addition to this, many long term care facilities’ admissions paperwork includes a Power of Attorney clause in which the patient grants a POA to the facility or its administrator to handle the patient's financial affairs and ensure that the costs of care are covered. When a family member is faced with placing a loved one in such a facility, the paperwork is often overwhelming and quite confusing as well.

Finally, some individuals grant POAs as part of an estate plan. In doing so, they will allow their agent to make gifts to certain individuals in an effort to minimize tax consequences. Again, this is a tremendous responsibility and must be considered carefully before making any decision.

If you need to speak to an attorney, call our Lawyer Referral Service at 412-261-5555.