What Exactly am I Authorized to Do with a POA? Part 2

       In last week’s blog post I started talking about the different types of powers of attorney. While it is important to have a power of attorney in place it is equally important to understand what it covers – what powers it confers upon the agent.

       We had two calls from family members designated as agents. The first caller was an agent under a financial power of attorney for her mother which included the power to talk with medical personnel and insurance companies about payment and claims. When it came time to talk with doctors and make a medical decision about her mother’s care, she was frustrated when they would not speak with her. Instead, they said her sister, who was the representative under her mom’s health care power of attorney, was the person they needed to speak with. The reason is because the power of attorney under which the caller was an agent only gave her the ability to talk with medical personnel and insurance companies concerning payment.

       The second caller needed to access her dad’s individual retirement account to pay for her care. She sent me the power of attorney which she said gave her the ability to access bank accounts and brokerage accounts and pay her mother’s bills. “So, why won’t the financial institution even talk to me”, she asked.

       I explained to her that because the power of attorney did not specifically cover IRAs, they would not honor the POA. Financial institutions generally view the documents narrowly. If there isn’t specific authorization to take the actions the agent is trying to carry out, they will turn the agent away.

       The lesson here is that the designation as agent by itself does not give that person the ability to do anything that is necessary on behalf of the principal. It’s also about what is in the document. What exactly are you – as agent – authorized to do? Now would be a good time to take a closer look.