Can I Revoke a Power of Attorney?

I wanted to cover something of a follow-up to last week’s blog entry entitled Why Won’t My Power of Attorney Work which you can find here: https://galligan-law.com/why-wont-my-power-of-attorney-work/.  In that article I talked about limitations to powers of attorney and scenarios when they won’t work or at least not well.  In this article, I want to briefly address how to revoke a power of attorney.  The recent article from nwi.com entitled  “Estate Planning: Revoking a power of attorney” also addresses this topic.

A Power of Attorney (POA) is a document that allows another person to act on your behalf. The person designated is referred to as the “Attorney in Fact” or the “Agent.”  However, sometimes a family faces difficulty because the choice of agent no longer makes sense, or perhaps was only needed for a brief time.  Even worse, the family may determine the agent is a bad actor whose authority needs to end.

If the creator of the POA wants to revoke it, they have to do so in writing.  They should also identify the person who is to be revoked as the POA and must be signed by the person who is revoking the POA.

Here’s the tricky part: the agent has to know it’s been revoked.  Unless the agent has actual knowledge of the revocation, they may continue to use the POA and financial institutions may continue to accept it.  If you are revoking a power of attorney because the agent isn’t suitable or a bad actor, you have a problem.  You can’t slip off to your estate planning lawyer’s office, revoke the POA and hope the person will never know.

Another way to revoke a POA, and this is the preferred method, is to execute a new one. In most states, most durable POAs include a provision that the new POA revokes any prior POAs. By executing a new POA that revokes the prior ones, you have a valid revocation that is in writing and signed by the principal.

If you already had an acting agent and you created the new POA, send them a copy and retain proof that you did so to demonstrate they were aware of the new POA and new appointment.

If the POA has been recorded for any reason such as use in a real estate transaction, the revocation should reference that fact and should be recorded just as a new POA would be filed to replace the old one. If the POA has been provided to any individuals or financial institutions, such as banks, life insurance companies, financial advisors, etc., they will need to be properly notified that it has been revoked or replaced.

Two cautions: not telling the bad and having her find out after the principal has passed or is incapacitated might be a painful blow, with no resolution. Telling the person during lifetime and before there are issues is a good idea. A diplomatic approach is best: the principal wishes to adjust her estate plan and the attorney made some recommendations, this revocation among them, should suffice.

Talk with your estate planning lawyer to ensure that the POA is changed properly, and that all POAs have been updated.

Reference: nwi.com (March 7, 2021) “Estate Planning: Revoking a power of attorney”

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Power of Attorney: Why It Is Important

Don't wait to create a power of attorney.
Don’t wait to create a power of attorney.

Unfortunately, you never know when a power of attorney will be needed to allow someone else to make financial and medical decisions for you. An accident or sudden illness can occur without warning. A power of attorney is a necessary document if your are too ill, injured, or lack the mental capacity to make your own decisions. The article, “Why you’re never too young for a power of attorney” from Lancaster Online, explains what these documents are, and what purpose they serve.

There are two basic power of attorney documents or “POA’s”: one for making financial decisions and one for making medical decisions. A financial POA may be effective immediately or when a doctor certifies that you are unable to handle your financial affairs. A medical POA  becomes effective when you cannot communicate a medical decision. Until then, you are completely in charge of decisions related to your medical care.

If you don’t have a POA and you are unable to make financial and medical decisions for yourself, a guardian must be appointed in a court proceeding to make decisions for you. This is an expensive and time consuming process and the outcome may not be what you would have wanted.

Anyone over the age of 18 should have a financial and medical power of attorney. Many parents start realizing this when their children go off to college. Parents are often surprised and frustrated when they find out that, because their college age children are considered adults, the parents no longer have access to their children’s financial and medical information, not even in an emergency.

While it’s never too early for a person 18 years of age or older to have medical and financial powers of attorney in place, you could wait until it’s too late. If you become incapacitated, you cannot sign a POA. We often see this when children of aging parents contact us in a panic because their parents never executed powers of attorney. If the aging parent lacks capacity and cannot sign a POA, the family is faced with the need to pursue a guardianship.

You should work with an estate planning attorney to create the powers of attorney you need.  An estate planning attorney will be able to tailor your POA to your exact needs. They will also make sure to create a document that gives proper powers to the people you select.

Review your POA’s at least annually to be sure that the people you have selected are still the people you want taking care of your financial and medical matters, if the need should ever arise.

Most important of all, don’t wait to have powers of attorney created for you. They are even more important than a Will because the powers of attorney affect your care while you are alive.

Learn more about powers of attorney and other estate planning documents.

Reference: Lancaster Online (May 15, 2019) “Why you’re never too young for a power of attorney”

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