The basics

What Are Powers of Attorney in a Nutshell?

What are Powers of Attorney all about?

Updated 2 February 2023 · 38 min read

This page:-

• discusses how Powers of Attorney are defined by their terms and the meaning of different titles for Powers of Attorney as well as unique language applying to Powers of Attorney in California

• examines key events in the life of a Power of Attorney and how a Power of Attorney protects its user and why a Power of Attorney might not be used

• addresses issues like what tasks cannot be delegated using a Power of Attorney and what kinds of Powers of Attorney cannot be used for certain purposes as well as discussing the use of government forms

• explains the use of Powers of Attorney for general or specific purposes and the use of Powers of Attorney by persons or commercial entities as well as how Powers of Attorney for persons are typically governed by legislation and not governed by legislation where the principal is a commercial entity

• discusses how a Power of Attorney must identify an agent and that an agent may be a commercial entity

• explains how a Power of Attorney may have multiple officeholders and may be used to allocate different tasks to different agents and may be designed to operate when the principal lacks capacity, as well as how a Power of Attorney may require inclusion of a positive duty to act and terminates upon completion of the authorized tasks

• discusses how a Power of Attorney is typically written and must accord with all relevant laws and be fit for purpose

• discusses the use of Powers of Attorney in California and Florida for mixed purposes

• examines the meaning of the word terms and rights,entitlements & obligations referable to Powers of Attorney

• discusses the refinement of laws relating to Powers of Attorney as well as differences between laws relating to Powers of Attorney in different states, including examination of similarities and differences in the legislation of the Six (6) Greater States.

A Power of Attorney Is Defined By Its Terms

Because a Power of Attorney can be used in such a wide variety of circumstances by any person or commercial entity, expressions like "it's a Power of Attorney" disclose almost no information at all about a particular Power of Attorney.

Every Power of Attorney is unique in fundamental respects, such as:

• when an agent is authorized to perform tasks in reliance upon the Power of Attorney
• what tasks an agent is authorized to perform
• how many agents are appointed under the Power of Attorney
• how an agent or agents are authorized to perform the authorized tasks
• who is authorized to perform tasks if an agent is ineligible

Like any legal instrument, an individual Power of Attorney is the sum of its precise words.

It is necessary to read the contents of the Power of Attorney in conjunction with any relevant legislation, to understand its operation, for example when it commences or terminates, whether an agent appointed under the Power of Attorney is entitled to remuneration, what is to occur if the principal lacks capacity, whether an agent may appoint sub-agents and who is to replace an agent who becomes ineligible as well as more fundamental aspects of the kind listed above, such as when an agent is authorized to perform tasks, as well as other basic aspects of a Power of Attorney such as the identity or identities of the person or persons or other legal entity or legal entities who the principal proposes for appointment as their agent or agents under the Power of Attorney and the many other features of its operation.

What Are The Meanings Of The Different Titles For Powers of Attorney?

A Power of Attorney might be titled "Power of Attorney" or have a longer title, such as "Durable Power of Attorney", "General Power of Attorney" or "Irrevocable Power of Attorney".

Words used in the title of a Power of Attorney might include: commercial, non-statutory non-durable, non-statutory durable, non-statutory, non-durable, durable, statutory, military, legislative, contractual, oral, irrevocable,
general, limited, special, specific, springing, temporary or ordinary, each word accounting for an aspect of a particular design.

It should not be assumed that because the title of a Power of Attorney does not contain a certain word, the Power of Attorney has or lacks a particular quality.

The qualities of a Power of Attorney can only be determined by considering the effect of the precise words it contains.

For example:

• as between two Powers of Attorney, one may be durable and yet, only one of them may be general and for example, one of them may be springing or irrevocable
• a Power of Attorney may be titled durable, yet also limited and perhaps also springing or irrevocable
• a Power of Attorney may be titled simply general and yet also be durable and springing

See the Titles & Types page of this Wiki for more insight, including a useful analogy that emphasises the ad hoc, uncertain nature of titles used for Powers of Attorney.

What Unique Language Applies to Powers of Attorney In California?

In contrast to many states, California tends to favour the term "attorney-in-fact", rather than the term "agent".

§4014 provides:

“Attorney-in-fact” means a person granted authority to act for the principal in a power of attorney, regardless of whether the person is known as an attorney-in-fact or agent, or by some other term.

Equally, most of the United States appears to prefer the term "successor agent", whereas California prefers the term "alternate agent".

§4014 provides:

“Attorney-in-fact” includes a successor or alternate attorney-in-fact and a person delegated authority by an attorney-in-fact.

Key Events In The Life Of A Power of Attorney

There are four (4) particularly important points in time, or periods of time with respect to a Power of Attorney, being creation, signing, appointment and termination.

Creation

In all of the Six (6) Greater States except for Florida, a principal being a person may define when a Power of Attorney becomes binding upon a principal or any agent.

The position is qualified in Florida, where a Power of Attorney for a person² cannot be defined to become effective in the future.³

The word "create" in the context of Powers of Attorney as it appears in this Wiki might, depending on its content, refer to:

• the mere creation of a Power of Attorney without the Power of Attorney having been properly executed by the principal
• the creation and proper execution of a Power of Attorney by the principal
• the point in time when: (a) a Power of Attorney has been properly executed by the principal; and (b) an agent, or perhaps all agents, have accepted appointment as an agent under the Power of Attorney

The mere creation of a Power of Attorney that has not signed by the principal could result in unexpected outcomes.

For example, an unsigned Power of Attorney 'found in a bottom drawer' could in principle, be presented to a Court and suggested to be evidence of a particular preference or intention, potentially in a context that may or may not relate directly to the Power of Attorney.

Of course, the Court would need to decide whether to accept this as correct and the fact that the Power of Attorney is unsigned would likely be taken into account by the Court in its deliberations, however this example illustrates the risk at stake.

Considerations when creating a Power of Attorney include:-

• intentions with respect to signing and storage of the Power of Attorney
• all planned and existing arrangements with respect to all aspects of the principal's affairs, including the terms of any existing or planned Powers of Attorney
• whether there is a need to revoke any existing Powers of Attorney
• whether the agent or agents proposed for appointment are willing to be appointed
• whether the Power of Attorney is fit for purpose

It is invariably good practice to clearly mark any draft document "Draft Only - not intended to have any legal consequence or be relied upon for any purpose" or similar.

Signing By The Principal

The proper execution of a Power of Attorney by the principal is arguably the most significant event in the life of a Power of Attorney.

Unless a Power of Attorney provides otherwise, it is presumed to be intended by the principal to be effective upon being properly executed by the principal.

In this context, the term "be effective" refers to becoming binding upon the principal.

Once a Power of Attorney is binding upon the principal:-

• a person or other legal entity identified as a proposed agent under the Power of Attorney may accept appointment; and thereafter
• the agent may go forth and rely upon the Power of Attorney as evidence of their appointment as an agent, for the purposes defined in the Power of Attorney

Only the terms of the Power of Attorney, or its revocation by the principal, or its termination might qualify this position.⁴

As to the validity of any signature of the principal:-

• in California, §4302 speaks of a third party being entitled to be provided signature specimens
• in Texas, New York, and Pennsylvania, legislation makes clear that absent circumstances warranting another conclusion, a third party may assume the signature of the principal on a Power of Attorney is genuine⁵
• in Florida legislation speaks in similarly favourable terms about this issue⁶
• in Illinois, legislation is silent on the issue

Between Acceptance Of Appointment And Termination

Having accepted appointment, subject to the terms of their appointment and the terms of their authority, an agent may commence to perform tasks as an agent appointed under the Power of Attorney.

An agent may be authorized to act differently, at different times performing different tasks, these matters being specified by the principal in the Power of Attorney.

Where one agent is named, subject to the terms of the Power of Attorney, the agent may immediately commence to perform tasks as an agent under the Power of Attorney

Where more than one agent is named:-

• a question may arise as to whether one of the named agents may accept appointment and commence to perform tasks before any other agent has accepted appointment
• the issue may be approached differently depending upon whether the named agents are authorized to act jointly or severally
• it is invariably best to address this issue in the Power of Attorney so it is clear how things are to work

A Special Word About New York

In New York, the position is qualified with respect to when an agent may commence to perform tasks in respect of a Power of Attorney for a person which is not excluded from the ambit of the legislation.

In New York a Power of Attorney that “designates” two or more agents is subject to §5-1501B(3)(a) which provides:

"the Power of Attorney takes effect when all the agents so designated have signed such power of attorney with their signatures acknowledged".

That said, once the Power of Attorney has become effective, in New York §5-1508 operates, which states: "..unless the principal provides otherwise in the Power of Attorney, if a vacancy occurs because of the death, resignation or incapacity of a co-agent, the remaining agent or agents may act for the principal.."

Loss Of Capacity

Loss of capacity may or may not be relevant to the authority of an agent to perform tasks for the benefit of the principal.

For example, compare the significance of capacity in respect of a durable Power of Attorney under which agents may:-

• act whether or not the principal has capacity (in which event capacity is not particularly significant)
• only act if the principal lacks capacity (in which event capacity is significant)⁷

Termination

Upon termination of a Power of Attorney, any appointment of an agent under the Power of Attorney and most of an agent's associated rights, entitlements and obligations under the Power of Attorney, invariably cease.

Surviving obligations include, for example:-

• the duty of an agent to continue to preserve confidentiality with respect to any information gained in the course of their appointment as an agent
• the principal's obligation to compensate an agent for expenses incurred during the term of their appointment
• duties of an agent with respect to providing accounts

General Grounds For Termination (Where Power of Attorney For Person Or Commercial Entity)

A Power of Attorney commonly terminates, unless it specifies otherwise, upon the Power of Attorney being revoked by the principal or its purpose being fulfilled.

Additional Grounds for Termination (Power of Attorney For A Person)

In addition:-

• a Power of Attorney for a person terminates when the principal dies
• a Power of Attorney for a person⁸ terminates if circumstances transpire that are prescribed in legislation to terminate the Power of Attorney

For example, a Power of Attorney for a person⁹ terminates under legislation:-

• in California, if the Power of Attorney is non-durable and the principal loses capacity¹⁰
• in Florida, if no agent is authorized to exercise authority and the Power of Attorney does not provide for another agent to act¹¹

In the Table Summary - Legislative Grounds For Termination is a full account of the legislative grounds for termination of a Power of Attorney for a person¹² in the Six (6) Greater States.

Additional Grounds for Termination (Power of Attorney For A Commercial Entity)

In addition, a Power of Attorney for a commercial entity terminates if and when the principal ceases to exist.¹³

How Does A Power of Attorney Protect Its User?

Unless another intention is evident, a Power of Attorney is assumed to be intended to serve the interests of the principal.

Agent Cannot Benefit

An agent must take positive steps to ensure that they do not derive a benefit in connection with the existence of a Power of Attorney, unless they are expressly authorized to receive the benefit, whether at the expense of the principal or otherwise.

An agent must account to the principal for any benefit derived by an agent in connection with a Power of Attorney.¹⁴

Other Principles Apply

These are many options and principles that enable a principal to regulate their dealings with an agent under a Power of Attorney.

For example, a principal may include terms:-

• entitling an agent or successor agent to appoint sub-agents
• identifying a protector with authority to appoint successor agents
• governing the role of an agent
• defining an agent's term of appointment
• requiring an agent to perform the tasks specified in the Power of Attorney
• entitling an agent to remuneration or other benefits
• allocating different tasks to different agents
• imposing conditions in respect of the appointment of an agent, successor agent or other officeholder

With So Much Protection, Why Wouldn't Someone Use A Power of Attorney?

Like any transaction, using a Power of Attorney involves risks that might justify the adoption of certain protections, in particular:-

• the risk that the Power of Attorney is used improperly
• the potential liability of the principal to the agent, for example with respect to:-
  • any obligation to pay any remuneration to an agent
  • any obligation to indemnify an agent
• the potential liability of the principal to a third party

These kinds of risks are capable of being managed.

For example suitable terms might be included in a Power of Attorney or perhaps a separate agreement (as between the principal and their agent or agents) dealing with:-

• audit or other risk management arrangements
• the entitlement of an agent to remuneration
• indemnity by the agent of the principal in respect of any claim made against the principal by a third party
• prevention of an agent dealing with any third party who has not agreed to release the principal from any possible future claim
• release of any potential claim by the agent against the principal

Many people are content to delegate tasks using a Power of Attorney without these kinds of safeguards.

What Tasks Cannot Be Delegated Using A Power of Attorney?

A person cannot use a Power of Attorney to authorize the performance of certain tasks, in particular tasks that involve:-

• a high level of purely personal discretion (such as swearing an Affidavit, consenting to marriage, divorce or adopting a child)
• matters of taste, including expressions of a creative or artistic nature (such as fulfilling a contract to paint a portrait of someone, or write an autobiography)
• matters that cannot be objectively performed by another legal entity (such as voting in an election)

More insight about this topic is found under headings like Tasks That An Agent Cannot Perform.

What Kinds Of Powers of Attorney Cannot Be Used For Particular Purposes?

Certain kinds of Powers of Attorney cannot be used for certain purposes.

Most notably in California for example, a Power of Attorney for Health Care must be used to delegate health care decisions.

More insight about this topic is found under the heading For What Purposes Can A Power of Attorney Be Used In California? and elsewhere in this Wiki.

What About Government Forms?

A Power of Attorney in California may be cast in the shape of a government form or custom-made.

The use of the word "shortform" in the title of government forms in some states reflects the brief nature of government forms in all states, including California.

For example, in New York and Illinois the government form is known as a "Statutory Short Form Power of Attorney."

In California the government form is known as a "Uniform Statutory Form Power of Attorney".

In Texas, the government form is known as a "Statutory Durable Power of Attorney."

A custom-made Power of Attorney typically:-

• facilitate more options than a government form
• affords the principal greater certainty in terms of how their Power of Attorney works

The use of government forms is discussed in more detail elswehere in this Wiki, including:-

• on the Government Forms page
• under the heading Worrying Trend Of Using Government Forms

A Power of Attorney May Be Specific Or General

A Power of Attorney created by a person may be specific or general:-

• specific refers to authorizing an agent to perform a specific task or tasks or a specific tasks or tasks
• general refers to authorizing an agent to perform any and all tasks that the principal might otherwise perform for themselves that an agent may perform¹⁶

A principal may allocate tasks to various agents however they see fit.

Where the principal is a commercial entity:-

• a grant of general authority may or may not be possible
• relevant considerations including the contents of the constituting documents for the commercial entity

A Power of Attorney May Be Created By A Person Or A Commercial Entity

A Power of Attorney (other than for health related purposes) may be created by a person or a commercial entity (i.e. a business trading as a company or partnership, a trust or an association etc.)

Considerations evidencing the right of a commercial entity to create a Power of Attorney include:-

• entitlement of a commercial entity to create a Power of Attorney in a taxation context¹⁷
• references to the use of Powers of Attorney by commercial entities in the legislation of at least some states, including their appointment as agents¹⁸
• many decided cases involving Powers of Attorney in which a commercial entity was either a principal or appointed as an agent¹⁹
• a general absence of any express prohibition on the creation of Powers of Attorney by commercial entities

In California, If The Principal Is A Person The Power of Attorney Is Typically Governed By Legislation

In California under §4052(a):

"If a Power of Attorney provides that the Power of Attorney Law of this state governs the Power of Attorney or otherwise indicates the principal's intention that the Power of Attorney Law of this state governs the Power of Attorney, this division governs the Power of Attorney and applies to acts and transactions of the attorney-in-fact in this state or outside this state where any of the following conditions is satisfied.."

§4052(a) goes on to specify various conditions, such as the principal being domiciled in California, the Power of Attorney conferring authority in relation to property located in California, the Power of Attorney being executed in California etc.

The reference to "the Power of Attorney Law" in §4052(a) is to be read with §4000 which states "This division may be cited as the Power of Attorney Law".

Hence, the division being referred to in §4052(a) is Division 4.5 of the California Probate Code, dealing with Powers of Attorney.

§4052(b) goes on to provide:-

"If subdivision (a) does not apply to the Power of Attorney, this division governs the Power of Attorney and applies to the acts and transactions of the attorney-in-fact in this state where either of the following conditions is satisfied:

(1) The principal was domiciled in this state when the principal executed the Power of Attorney.

(2) The principal executed the Power of Attorney in this state."

It follows that if the principal is domiciled in California or the Power of Attorney is executed in California, the legislation will govern the Power of Attorney, even if the principal does not state that the legislation governs the Power of Attorney or otherwise indicate that principal's intention is that the legislation governs the Power of Attorney.

In California under §4050, Powers of Attorney for the following purposes are excluded from being subject to the legislation:-

• Powers of Attorney that delegate voting rights with respect to management of a commercial entity
• Powers of Attorney that delegate authority coupled with an interest in the subject of the power
• Powers of Attorney that pertain to reciprocal insurance exchanges

Notably, §4050 and §4052 are to be read with §4010 and §4022.

§4010 states:

"Unless the provision or context otherwise requires, the definitions in this chapter govern the construction of this division"

§4022 states:

"“Power of attorney” means a written instrument, however denominated, that is executed by a natural person having the capacity to contract.."

It follows that §4050 and §4052 only apply to a Power of Attorney created by a person, not a commercial entity.

In California, If The Principal Is A Commercial Entity The Power of Attorney Is Not Governed By The Legislation

A Power of Attorney created in California by a commercial entity is not governed by the legislation.

This is because of the operation of §4010, §4022, §4050 and §4052, as discussed under the previous heading.

A Power of Attorney Must Identify An Agent

A Power of Attorney must identify at least one agent.

In all of the Six (6) Greater States but for Illinois, a Power of Attorney may identify more than one agent.

In Illinois:-

• if a Power of Attorney is created using a government form, §2-10.5 provides that only one agent may be appointed
• if a Power of Attorney is custom-made it may be used to appoint one or more agents

Notably in Illinois, §2-10.5 recognizes that where a government form is used, there is no restriction upon the number of successor agents who may be appointed.

A Power of Attorney May Be Used To Appoint A Commercial Entity As An Agent

Legislation in five (5) of the Six (6) Greater States expressly recognizes the right of a person²⁰ to appoint a commercial entity as an agent under a Power of Attorney.

In Texas, where there is no legislation governing non-durable Powers of Attorney:-

• in respect of a non-durable Power of Attorney, there is judicial support for a commercial entity being able to be appointed as an agent
• under a durable Power of Attorney,²¹ the appointment of a commercial entity as an agent raises interesting questions

This is discussed in more detail under the heading A Commercial Entity May Be An Agent.

A Power of Attorney May Have Multiple Officeholders

Under a Power of Attorney for a person, a principal may appoint various officeholders.

Officeholders might include:-

• successor agents
• sub-agents (not in Florida²²)
• a protector (in California, Texas, Illinois or Pennsylvania)
• a monitor (in New York)
• sub-servants or delegates (not in Florida²³)

Under a Power of Attorney for a commercial entity it may be possible to appoint:-

• successor agents
• sub-agents
• other officeholders with roles akin to a protector, monitor, sub-servant or delegate

Relevant considerations in respect of a Power of Attorney for a commercial entity would include:-

• any limitations imposed by common law
• the content of the constituting documents for the commercial entity

Successor Agents

A principal may identify one or more successor agents, authorized to replace an agent who is ineligible.

In California, Texas, Illinois and Pennsylvania, a protector may be appointed under a Power of Attorney for a person²⁴ with authority to either:-

• "designate" successor agents in California, Texas & Illinois (see CA §4203, TX §751.023(b), IL §2-10.3)
• "appoint" successor agents in Pennsylvania (see PA §5602(b))

Sub-Agents

The right of a principal who is a person²⁵ to authorize the appointment of sub-agents works differently in each of the Six (6) Greater States:-

• in California an agent may revocably delegate "mechanical acts"²⁶
• in Texas and Pennsylvania, the right to to appoint sub-agents must be expressly authorized in the Power of Attorney²⁷

• In New York and Illinois legislation does not prohibit the appointment of sub-agents and the topic of sub-agents is touched upon in the government form in positive terms
  • in Illinois, a paragraph must be struck out of the government form to remove authority to appoint sub-agents
  • in New York, the government form contains a line entry which may be ticked to include authority for an agent to appoint sub-agents and space to name sub-agents
• In Florida the appointment of sub-agents is prohibited²⁸

If the principal is a commercial entity:-

• there is no legislative restriction upon the appointment of sub-agents
• restrictions may exist for example, in the constituting documents for the commercial entity

The Restatement of the Law (Second) Agency, 1958 and Restatement of the Law (Third) Agency (2006) both recognized the right to appoint sub-agents.

Protectors & Monitors

Legislation in many of the Six (6) Greater States recognizes the right of a principal who is a person²⁹ to appoint 'less vanilla' officeholders under a Power of Attorney, such as:-

• a ‘protector' being someone authorized to:-
  • "designate" successor agents in California, Texas & Illinois (see CA §4203, TX §751.023(b), IL §2-10.3)
  • "appoint" successor agents in Pennsylvania (see PA §5602(b))
• a monitor in New York, being someone entitled to inspect certain records (§5-1509)

Sub-Servants & Delegates

The right to appoint sub-servants or delegates, for whose actions liability may or may not rest with the principal, was recognized in §5 of the Restatement of the Law (Second) Agency (1958).

This is discussed in more detail under the heading Difference Between Sub-Agents, Delegates & Sub-Servants.

A Power of Attorney May Be Used To Allocate Different Tasks To Different Agents

A principal may appoint multiple agents under a Power of Attorney and authorize different agents to perform different tasks.

A principal might for example, authorize certain tasks to be performed:-

• by agreement as between all agents
• by agreement as between less than all agents
• independently by any agents
• independently by one or more, but not all agents
• by majority as between all agents
• by majority as between less than all agents

This is discussed in more detail on the page titled Allocating Tasks.

A Power of Attorney May Be Designed To Operate When The Principal Lacks Capacity

Each of the Six (6) Greater States have introduced legislation entitling a person to create a Power of Attorney that may operate in the event that the principal lacks capacity.

This kind of Power of Attorney is commonly known as a durable Power of Attorney.

Concepts related to durable Powers of Attorney are approached differently in the Six (6) Greater States.

General and technical aspects of durable Power of Attorney are explored in the Exposé about durable Power of Attorney in this Wiki.

A Power of Attorney May Require Express Inclusion Of Any Positive Duty To Act

In California and Illinois, it may be valuable to include terms in a Power of Attorney dealing with the obligation of an agent to act.

In California and Illinois, legislation expressly excludes a positive duty to act on the part of an agent appointed under a Power of Attorney created by a person.³⁰

In Pennsylvania, under a Power of Attorney created by a person³¹ it may be arguable that a Power of Attorney cannot provide otherwise.

In Texas, New York and Florida:-

• legislation does not directly address the existence or otherwise of a positive duty to act
• views may differ as to whether a positive duty to act is imposed upon agent
• outcomes associated with this issue may be improved by including express terms dealing with this issue in a Power of Attorney

This topic is discussed further under the heading An Agent May Not Have A Positive Duty to Act.

A Power of Attorney Terminates Upon Completion of The Authorized Tasks

If the tasks authorized to be performed under a Power of Attorney are capable of being fully performed, upon completion of those tasks, the Power of Attorney terminates.

This principle is codified with respect to Powers of Attorney for persons³² in four (4) of the Six (6) Greater States (see California §4152, Texas §751.131, New York §5-1511, Florida §709.2109).

A general Power of Attorney or a Power of Attorney under which an agent is authorized to perform tasks on an ongoing basis cannot terminate by virtue of fulfilling its purpose.

The Case Study - Fulfilment of Purpose contains further insight.

A Power of Attorney Is Typically Written

A Power of Attorney is typically recorded in writing.

To be effective, a Power of Attorney must contain terms that are intended to be legally binding.

Absent reason to draw any other conclusion, a Power of Attorney that is properly executed by the principal is assumed to be intended to be legally binding.

The creation of a Power of Attorney orally, as opposed to in writing, is exceptionally rare.

A Power of Attorney Must Be Created In Accordance With All Relevant Laws

A Power of Attorney must suit the needs of the principal and be created in accordance with all relevant laws.

If a person has affairs in multiple states, they might:

• create a separate Power of Attorney to govern their affairs in each relevant state; or
• create a single Power of Attorney and look to rely on legislation in the various states to permit that Power of Attorney to be recognized in other states

There are other possibilities.

For example, a person might adopt a combination of these two kinds of solutions, creating both:-

• separate Powers of Attorney to solely govern their affairs in certain states
• other Powers of Attorney intended to govern their affairs in more than one state

For commercial entities, the options are more limited.

Unless a Power of Attorney is created in accordance with all relevant laws, it is likely to be rejected by third parties or a Court.

A Power of Attorney Must Be Fit For Purpose

A Power of Attorney is fit for purpose if it:-

• complies with all relevant laws
• fully serves its intended purpose
• cannot be used for any other purpose; and
• fully protects the interests of the principal

Use Of Powers of Attorney For Mixed Purposes In California And Florida

In California and Florida, legislation designed to facilitate the creation of a Power of Attorney by a person³³ for the purpose of delegating tasks relating to property, financial and legal affairs can also be used for other purposes:

• in California, §4123 provides for inclusion of “personal care” tasks, said to include "where the principal will live, providing meals, hiring household employees, providing transportation, handling mail, and arranging recreation and entertainment” and recognizes that in a Power of Attorney for commercial purposes an agent might be authorized to perform personal care tasks, in addition to “all lawful subjects and purposes or with respect to one or more express subjects or purposes”
• in Florida, §709.2109 provides that a durable Power of Attorney may be used to authorize an agent to make ‘health care’ decisions

Terms

The notion of terms arises in a variety of contexts with respect to Powers of Attorney.

For example, the expression "the terms of a Power of Attorney" typically refers to its contents, that is, the words that make up the Power of Attorney.

The word "term" is also used in other contexts.

For example, we sometimes speak of:

• the "term of Power of Attorney", referring to its 'lifespan', being the period between its commencement and termination
• a "term of appointment" referring to the period within the 'lifespan' of a Power of Attorney between the points in time when an agent:-
  • is appointed; and
  • ceases to be able to remain appointed
• "terms of authority" referring to provisions within a Power of Attorney that define what an agent may do and when

We also speak of specific kinds of terms, such as "remuneration terms" dealing with the remuneration an agent is entitled to receive, or "termination terms" that deal with termination etc.

The Case Study - Different Types of Terms illustrates these concepts.

Rights, Entitlements & Obligations

A Power of Attorney is a legal instrument that triggers various rights, entitlements and obligations.

For example, the creation of a Power of Attorney typically:-

• imposes a duty upon an agent to act in the best interests of the principal
• imposes an obligation upon the principal to:-
  • pay any remuneration or expenses due to an agent
  • assume liability for any loss or damage occasioned to a third party in the course of an agent performing tasks under the Power of Attorney
• entitles third parties dealing with an agent to assume that the agent is validly authorized and appointed

This is merely a brief snapshot of the kinds of rights, entitlements and obligations that a Power of Attorney may trigger.

Every Power of Attorney is different and may lead to different consequences and outcomes in various circumstances.

For example:-

• a third party on notice of circumstances that would justify another conclusion may not be entitled to assume an agent is validly authorized and appointed
• terms of a Power of Attorney may disentitle an agent to remuneration
• terms of a Power of Attorney or perhaps some other legal instrument may disentitle an agent from entitlement to certain indemnities by the principal

The circumstances in which the rights, entitlements and obligations are to be ascertained often affects their content.

For this reason, rights, entitlements and obligations triggered by the creation of a Power of Attorney are best ascertained having regard to specific circumstances.

Refinement Of Laws Governing Powers Of Attorney

The varying nature of laws relating to Powers of Attorney is evidenced by the vast differences in the legislation of the Six (6) Greater States.

The law relating to Powers of Attorney continue to be examined and refined by the judiciary (i.e. judges).

In addition, new legislation is passed from time to time, effecting changes to the law relating to Powers of Attorney.

It may be fair to say that the law relating to non-durable Powers of Attorney changes less frequently than the law relating to durable Powers of Attorney.

This is because durable Powers of Attorney have a relatively short history and perform a more difficult function, as compared to non-durable Powers of Attorney.

Are Powers of Attorney Laws Different From State To State?

Comparing the differences between Power of Attorney laws in different states is difficult.

This is because:-

• the laws in each state are different
• in each state there are Powers of Attorney to which the legislation does not apply
• often a topic addressed in the legislation of one state is not touched upon in the legislation of another state

Set out under the heading How Does California Compare below are many examples of differences between the legislation in California and other states.

However, there is one difference in approach as between the Six (6) Greater States that deserves special mention.

The Six (6) Greater States are split 50/50, with respect to the prescribed means to create a durable Power of Attorney, that is a Power of Attorney to survive incapacity of the principal:-

• in California, Texas and Florida, a durable Power of Attorney must include certain formula of words expressing that intention
• in New York, Illinois and Pennsylvania, legislation imposes an assumption that a Power of Attorney is intended to survive incapacity, unless it states otherwise

Other major differences in terms of approach include:-

• Texas preferring not to address non-durable Powers of Attorney in its legislation
• the prohibition upon the use of springing or general Powers of Attorney in Florida (discussed further under the next heading)

These kinds of differences can pose real problems.

For example, it may be difficult to rely on legislation enabling a Power of Attorney to be recognized in two states, if the Power of Attorney is not compliant with the laws of both states.

Examples of Similarities

Certain principles are codified in many states and in many instances, the same subject matter is covered in the legislation of many states.

Common Principles

Here are two examples of principles that are codified in the Six (6) Greater States with respect to Powers of Attorney for a person:[^340]

• the act of an agent is binding upon the principal:-
  • see §4125 in California
  • see §751.051 in Texas, §5-1506 in New York , §709.2201 in Florida, §2-6 in Illinois and §5604 & §5604.1(g) in Pennsylvania
• the principal may appoint more than one agent under a Power of Attorney:-
  • see §4202 in California
  • see §751.051 in Texas, §5-1508 in New York , §709.2111 in Florida, §2-10.5 in Illinois (although this section prevents more than one agent being appointed if a government form is used) and §5604 & §5602(b) in Pennsylvania

Common Subject Matter

The legislation of the Six (6) Greater States often covers the same, or similar, subject matter.

In such instances, the relevant states may approach the issue at stake differently, as illustrated by many examples set out under the next heading.

California Compared To Other States

Below are some examples of differences as between the Six (6) Greater States, focusing upon the experience in California.

These examples pertain to Powers of Attorney for persons that are not excluded from the ambit of the legislation in each state, other than where mention is made of non-durable Powers of Attorney in Texas, which are not governed by legislation and remain governed by common law.

• in California a principal in respect of a Power of Attorney for a person³⁴ may grant general authority to do anything a person might lawfully do by an agent³⁵:
  • in Pennsylvania this is authorized³⁶
  • in Florida this is prohibited³⁷
  • in New York and Illinois this is presumably authorized³⁸
  • in Texas:-
    • this is authorized in respect of a durable Power of Attorney³⁹
    • this presumably is authorized in respect of non-durable Power of Attorney⁴⁰

• in California a Power of Attorney may be created that becomes effective at a future point in time⁴¹:-
  • in Florida this is prohibited⁴²
  • in New York, Illinois & Pennsylvania this is permitted⁴³
  • in Texas:-
    • this is authorized in respect of durable Powers of Attorney⁴⁴
    • this seems likely to be authorized in respect of non-durable Powers of Attorney⁴⁵

• in California an agent is entitled to remuneration unless the Power of Attorney provides otherwise⁴⁶ accepting that:-

  • in Florida and Pennsylvania the position is similar⁴⁷
  • in New York the position is opposite to that in California, accepting that an agent is not entitled to remuneration unless the Power of Attorney provides otherwise⁴⁸
  • in Illinois, legislation is silent on the subject of remuneration
  • in Texas:-
    • an agent's right to remuneration is expressly recognized with respect to durable Power of Attorney⁴⁹
    • the position with respect to a non-durable Power of Attorney remains a matter of common law

• in California if a Power of Attorney for a person⁵⁰ is used to appoint multiple agents the agents must make decisions unanimously, unless the Power of Attorney provides otherwise:⁵¹
  • by contrast, in the other five (5) of the Six (6) Greater States, legislation prescribes a default position with respect to how decisions are to be made where a Power of Attorney is silent upon the issue which is slightly different, accepting that the net effect of these kinds of provisions in each of the Six (6) Greater States is the same, because ultimately, a default position is imposed by the legislation and if the principal wishes to do so, they can define their own, preferred arrangement
  • notably:-
    • in New York and Pennsylvania if a Power of Attorney for a person⁵² appoints multiple agents and is silent upon the issue of how they must make decisions, decisions must be made jointly⁵³
    • in Florida and Texas if a Power of Attorney for a person⁵⁴ appoints multiple agents and is silent upon the issue of how they must make decisions, decisions must be made severally⁵⁵
    • in Illinois if a Power of Attorney for a person⁵⁶ appoints multiple agents and is silent upon the issue of how they must make decisions, decisions must be made by majority⁵⁷

• in California a third party is obliged to deal with an agent under threat of legal proceedings⁵⁸ (subject to modest exceptions, such as where the third party can show that they would not be required to deal with the principal in the same circumstances or reasonably believe that the Power of Attorney is invalid):
  • the position is similar:-
    • in Pennsylvania and Florida⁵⁹
    • in Texas with respect to durable Power of Attorney⁶⁰
  • the position is different in New York , because this obligation upon an agent only arises if a government form has been used⁶¹

• in California a principal may identify a ‘protector’ who may designate successor agents:⁶²

  • this is also permitted in Illinois and Pennsylvania⁶³
  • this is permitted in Texas with respect to durable Power of Attorney⁶⁴
  • there is no reference to any similar officeholder in the legislation of New York
  • as for Florida:-
    • legislation makes no mention of such an officeholder
    • limitations upon the appointment of sub-agents suggest a conservative approach might be taken to any notion of appointing a protector

• in California an agent must sign the Power of Attorney to evidence their acceptance of appointment

which is not required where using a durable Power of Attorney in Texas (§751.022) or any Power of Attorney in Florida (§709.2113) (unless the Power of Attorney states otherwise) and required in New York (§5-1501B(1)(c))

• in California an agent may delegate their authority (i.e. appoint sub-agents see §4205)

which is also possible in Texas (§751.031(b)(5)) in respect of a durable Power of Attorney. Appointing sub-agents is prohibited in Florida (§709.2114(b)). In Pennsylvania, it is permitted if the principal expressly authorizes appointment of sub-agents in the Power of Attorney (§5602(b)). See the heading Original Or Successor Agent May Appoint Sub-Agent for a discussion of the topic of sub-agents being touched upon in the [government form] in Illinois and New York in positive terms

• in California there is no restriction preventing multiple agents designated to act together cannot commence prior to all agents accepting appointment

similar to Texas, Florida, Illinois and Pennsylvania, there is no equivalent to §5-1501B(3)(a) in New York under which multiple agents designated to act together cannot commence prior to all agents accepting appointment: §5-1501B(3)(a)

• in California management of safety deposit boxes is not specifically addressed in legislation, unlike in Florida (see §709.2114(1)(d))

• in California whether a positive duty to act exists (§4230) is addressed in legislation as it is in Illinois (see §2-7), whilst in Texas, Florida, Pennsylvania and New York this issue is not addressed in direct terms

in California there is no provision like in §5-1501C in New York, which excludes from the scope of the legislation Powers of Attorney that are “given primarily for a business or commercial purpose” (§5-1501C cites examples including a power coupled with an interest in the subject of the power, a power to benefit a creditor, a power to transfer or dispose of an asset, a proxy to exercise voting rights in respect of management of an entity, a power authorizing a third party to file a document with a government agency and various other contexts including accepting service of process, selling real property and similar)

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