When do power of attorney documents lose their authority?

On Behalf of | Feb 1, 2024 | Estate Planning

An Arizona estate plan typically includes documents that dictate a person’s wishes for distribution of their property after their death, such as a Last Will and Testament or Living Trust. However, the most thorough and useful estate plans typically also include provisions for situations in which someone cannot handle their own affairs during their lifetime. Powers of attorney are popular inclusions in many Arizona estate plans, as they allow people to arrange for their affairs to be managed on their behalf if they later face a temporary or permanent incapacity.

There are several different types of power of attorney documents that people may sign when thinking about how to protect themselves if they ever become incapacitated. Power of attorney documents transfer authority for financial or medical matters to another person known as an “agent.” But when do powers of attorney lose their legal authority?

When someone’s condition improves

Not everyone who experiences a debilitating medical event becomes permanently incapacitated. Many people recover from short-term medical setbacks and even more extreme experiences, like a coma. If the person who signed the power of attorney documents regains their testamentary capacity due to medical improvement, they can revoke the power of attorney, which means the agent loses their legal authority over the person’s affairs. But if a power of attorney becomes effective as a result of an incapacitating condition or event, then a letter of capacity from a physician may be required to revoke the authority.

When someone becomes permanently incapacitated

In some cases, the power of attorney documents are only meant to be effective during a person’s temporary medical or mental incapacity. In other cases, the authority granted by a power of attorney can last until a person’s death if they never regains capacity. In addition, a power of attorney may become invalidated if a judge makes a finding of incapacity and finds the person to be in need of a court-appointed guardian or conservator. People often opt to create durable power of attorney documents that are intended to allow the agent to retain their authority even after someone has been deemed permanently incapacitated. Signing a durable general power of attorney offers protection against future guardianship or conservatorship proceedings. The durable power of attorney document can also serve as notification to the court that if a guardian or conservator must be appointed for legal reasons, the incapacitated person chooses for their agent to be appointed in those roles.

When someone dies

Power of attorney documents only have legal authority during the signer’s lifetime. After that person dies, their power of attorney documents are no longer valid and their testamentary documents, such as a Will or Trust take over. The agent must then give up their authority to whoever the deceased person designated as the personal representative of their estate and/or as trustee of their trust.

Sometimes, those drafting power of attorney documents choose to integrate special provisions that impose additional limitations on the authority assumed by their agent or attorney-in-fact. Understanding when powers of attorney lose their authority may help people create estate plans that best align with their personal wishes.