# Nature of A Power of Attorney

> What is the nature of a Power of Attorney?

Source: https://wiki.powersofattorney.com/nature · Updated 28 January 2023

This page examines the [nature](https://wiki.powersofattorney.com/nature#nature) of a *Power of Attorney* and how [conflicts between the terms of a *Power of Attorney* and the law are resolved](https://wiki.powersofattorney.com/nature#law-versus-express-terms).

This page discusses how a *Power of Attorney* [differs from an agency agreement](https://wiki.powersofattorney.com/nature#how-does-a-power-of-attorney-differ-from-an-agency-agreement) and how an [agent differs from a trustee](https://wiki.powersofattorney.com/nature#how-does-an-agent-under-a-power-of-attorney-differ-from-a-trustee).

The contents of this page are focused upon *Powers of Attorney* for [commercial](https://wiki.powersofattorney.com/terms#meaning-of-commercial) purposes.

### What Is The Nature Of A *Power of Attorney*?

A *Power of Attorney* is the sum of all its contents, read together in conjunction with the [general law](https://wiki.powersofattorney.com/terms#meaning-of-the-general-law).

Unless a contrary intention is evidenced by the terms of the *Power of Attorney* or perhaps a [separate](https://wiki.powersofattorney.com/terms#meaning-of-separate-agreement), qualifiying agreement:-

- the [tasks](https://wiki.powersofattorney.com/whatcanagentdo#there-are-lots-of-examples-of-commercial-tasks) specified in a *Power of Attorney* may be attended to by the [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) in the absence of the [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power)
- the delegation is not exclusive as against the [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power) (i.e. the [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power) may still perform the relevant [tasks](https://wiki.powersofattorney.com/whatcanagentdo#there-are-lots-of-examples-of-commercial-tasks) themselves)
- an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) is not permitted to [benefit](https://wiki.powersofattorney.com/whatisapoa#agent-cannot-benefit) from their appointment
- an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) must perform the relevant [tasks](https://wiki.powersofattorney.com/whatcanagentdo#there-are-lots-of-examples-of-commercial-tasks) for the exclusive benefit of the [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power)

Any qualification of these kinds of principles must be recorded in express terms, consistent with the [four corners rule](https://wiki.powersofattorney.com/terms#meaning-of-four-corners-rule).

### Law Versus Express Terms

Where any express terms (*i.e. actual words*) in a *Power of Attorney* are contrary to the [general law](https://wiki.powersofattorney.com/terms#meaning-of-the-general-law):-

- in some instances, the [general law](https://wiki.powersofattorney.com/terms#meaning-of-the-general-law) may submit to the express terms in the *Power of Attorney*
- in other instances, seeking to interfere with the [general law](https://wiki.powersofattorney.com/terms#meaning-of-the-general-law) through the terms of a *Power of Attorney* may invalidate the whole or part of a *Power of Attorney*
- rights flowing from the inconsistency may be automatic or exercisable at the discretion of a particular party[^1]

The best way to avoid these issues is to ensure that the terms of a *Power of Attorney* are consistent with the [general law](https://wiki.powersofattorney.com/terms#meaning-of-the-general-law).

### How Does a *Power of Attorney* Differ From An Agency Agreement?

*Powers of Attorney* are a type of agency, except to the extent that the [general law](https://wiki.powersofattorney.com/terms#meaning-of-the-general-law) applicable to *Powers of Attorney* provides its own rules.[^2]

Unlike [agency agreements](https://wiki.powersofattorney.com/terms#meaning-of-common-agency-agreement), *Powers of Attorney* are:-

- specifically regulated by [legislation](https://wiki.powersofattorney.com/legislation#the-legislation-governs-powers-of-attorney-for-persons) that varies from state to state[^3]
- able to be cast by a [person](https://wiki.powersofattorney.com/terms#meaning-of-person-ie-natural-person) in terms that mean that the *Power of Attorney* continues to be effective even if the [principal](https://wiki.powersofattorney.com/principal#the-principal-is-the-entity-that-makes-the-power) becomes unable to make decisions for themselves[^4]
- able to be cast using a 'statutory design' (i.e. a [government form](https://wiki.powersofattorney.com/governmentforms#government-forms-in-ca-tx-ny-il)) in many states[^5]

An [agency agreement](https://wiki.powersofattorney.com/terms#meaning-of-common-agency-agreement) has none of these features.

### How Does An Agent Under a *Power of Attorney* Differ From A Trustee?

An [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) appointed under a *Power of Attorney* and the trustee of a trust are invariably both [fiduciaries](https://wiki.powersofattorney.com/terms#meaning-of-fiduciary).

However:-

- an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) rarely acquiring legal title, unlike the trustee of a trust who typically holds legal title to trust property
- an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) is authorized to [use their signature](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-signs-where-the-principal-would-sign) to transact in the name of the [principal](https://wiki.powersofattorney.com/en/principal#the-principal-is-the-entity-that-makes-the-power), whereas a trustee is typically the transacting party when performing trust transactions
- an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) typically does not have a [positive duty to act](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-may-not-have-a-positive-duty-to-act), unlike a trustee[^6]

**Next Page**

**Overview**

- **The [next page](https://wiki.powersofattorney.com/usesofpoa) **examines the use of *Powers of Attorney*** by commercial entities and persons in **California**, including purposes for using durable and non-durable *Powers of Attorney*.**

**Headings**

The headings on the next page are:

- [For what **purposes** can a *Power of Attorney* be used in California](https://wiki.powersofattorney.com/usesofpoa#for-what-purposes-can-a-power-of-attorney-be-used-in-california)
- [**Why would a person use** a *Power Of Attorney*?](https://wiki.powersofattorney.com/usesofpoa#why-would-a-person-use-a-power-of-attorney)
- [**Use** of *Powers of Attorney* **by commercial entities**](https://wiki.powersofattorney.com/usesofpoa#use-of-powers-of-attorney-by-commercial-entities)
- [Deciding **whether to use a durable or non-durable** *Power of Attorney*](https://wiki.powersofattorney.com/usesofpoa#deciding-whether-to-use-a-durable-or-non-durable-power-of-attorney)
- [**Uses for non-durable** *Powers of Attorney*](https://wiki.powersofattorney.com/usesofpoa#uses-for-non-durable-powers-of-attorney)
- [**Uses for durable** *Powers of Attorney*](https://wiki.powersofattorney.com/usesofpoa#uses-for-durable-powers-of-attorney)
- [*Powers of Attorney* for **health care**](https://wiki.powersofattorney.com/usesofpoa#powers-of-attorney-for-health-care)
- [Delegating **personal tasks**](https://wiki.powersofattorney.com/usesofpoa#delegating-personal-tasks)

[^1]: For example, a *Power of Attorney* may be [voidable](https://wiki.powersofattorney.com/terms#meaning-of-voidable), as discussed in articles like [Does The Agency Die When The Principal Becomes Mentally Incapacitated? Alfred Mukatis (1983)](https://digitalcommons.law.seattleu.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1163&context=sulr) and [Incompetent Principals, Competent Third Parties, and the Law of Agency, Alexander Meiklejohn (1986)](https://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=2136&context=ilj).
[^2]: This was recognized for example, in California in the [1994 California Law Revision Commission Report](http://www.clrc.ca.gov/pub/Printed-Reports/Pub181.pdf) which led to enactment of [Division 4.5 of the Probate Code](https://leginfo.legislature.ca.gov/faces/codes_displayexpandedbranch.xhtml?tocCode=PROB&division=4.5.&title=&part=&chapter=&article=&nodetreepath=6) stated "..*Powers of Attorney are a type of agency, except to the extent that the Power of Attorney Law provides its own rules..*"and went on to observe that "*[§4051](https://codes.findlaw.com/ca/probate-code/prob-sect-4051.html) .. makes clear that the general agency statutes and the common law of agency apply to Powers of Attorney under this division, except where this division provides a specific rule.*"
[^3]: As an example of circumstances where a *Power of Attorney* is regulated by [legislation](https://wiki.powersofattorney.com/legislation#the-legislation-governs-powers-of-attorney-for-persons) in circumstances where no comparably equivalent legislation governs [agency agreements](https://wiki.powersofattorney.com/terms#meaning-of-common-agency-agreement), in **California** [§4231.5](https://codes.findlaw.com/ca/probate-code/prob-sect-4231.5.html) (cited under the heading [Agent Cannot Benefit](https://wiki.powersofattorney.com/whatisapoa#agent-cannot-benefit)) renders an [agent](https://wiki.powersofattorney.com/agentswhatisagent#an-agent-is-an-entity-appointed-by-the-principal-to-represent-and-bind-the-principal) liable for certain damages, there being no equivalent legislative provision applicable in respect of the breach of an [agency agreement](https://wiki.powersofattorney.com/terms#meaning-of-common-agency-agreement).
[^4]: See [durable](https://wiki.powersofattorney.com/typescommonlyusedpersons#durable-powers-of-attorney) *Powers of Attorney*.
[^5]: See for example, the Uniform Statutory Form *Power of Attorney* (i.e. [government form](https://wiki.powersofattorney.com/governmentforms#government-forms-in-ca-tx-ny-il)) in **California** which is found in [§4401](https://codes.findlaw.com/ca/probate-code/prob-sect-4401.html).
[^6]: For example, the [1994 Californian Law Reform Commission report](http://www.clrc.ca.gov/pub/Printed-Reports/Pub181.pdf) referred to the positive duty of a trustee in these terms: "*Under the Trust Law, if a trustee accepts the trust, the trustee becomes subject to all applicable duties to administer the trust, cannot later refuse to act, and may resign only by following the procedures prescribed in the statute or the trust instrument. A trustee accepts by signing the trust instrument or knowingly exercising powers under the trust, except in emergency situations. Once the trustee has accepted the trust, the trustee has a duty to administer the trust, which does not end until the trustee is removed or allowed to resign*." By contrast, [§4230](https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=PROB&division=4.5.&title=&part=2.&chapter=4.&article=2.) under the *Californian Probate Code* states *“(a) Except as provided in subdivisions (b) and (c), a person who is designated as an.. [agent] has no duty to exercise the authority granted in the Power of Attorney and is not subject to the other duties of an.. [agent], regardless of whether the principal has become incapacitated, is missing, or is otherwise unable to act.." Subdivision (b) states: "Acting for the principal in one or more transactions does not obligate an.. [agent] to act for the principal in a subsequent transaction, but the.. [agent] has a duty to complete a transaction that the.. [agent] has commenced.." and subdivision (c) states: "If an.. [agent] has expressly agreed in writing to act for the principal, the.. [agent] has a duty to act pursuant to the terms of the agreement.."* Beyond these provisions, the mandatory notice for [durable](https://wiki.powersofattorney.com/typescommonlyusedpersons#a-durable-power-of-attorney-operates-if-the-principal-lacks-or-may-lack-capacity) *Powers of Attorney* in [§4128](https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=PROB&division=4.5.&title=&part=2.&chapter=2.&article=) contains the words: *"Your agent (attorney-in-fact) has no duty to act unless you and your agent agree otherwise in writing"* and [§4266](https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=PROB&division=4.5.&title=&part=2.&chapter=4.&article=3.) provides: *"....the grant of authority to an.. [agent], whether by the Power of Attorney, by statute, or by the court, does not in itself require or permit the exercise of the power.  The exercise of authority by an.. [agent] is subject to the.. [agent's] fiduciary duties.."*