Powers of an Agent

In general, a power of attorney is a legal document that allows a person, known as the principal, to appoint another person, called the “attorney-in-fact or agent”, to act on behalf of the principal regarding financial/property matters. The powers that can be listed in the power of attorney can be limited to a specific act, or they can be broad and sweeping, allowing the agent to do virtually anything. However, the agent may only perform acts that are specifically listed in the power of attorney document. A power of attorney is effective during the principal’s lifetime and terminates at death.


By default, a power of attorney becomes void at the moment the principal becomes incapacitated. Because planning for incapacity is the main purpose of a power of attorney in estate planning, the power of attorney must be “Durable”. A durable power of attorney is one that specifically states that it does not become void when the principal becomes incapacitated.

The durable power of attorney may become effective immediately or only upon the determination of incompetency. At first glance, most people would rather not grant immediate access to such broad sweeping powers that are found in a durable power of attorney. Rather, they would prefer those powers spring into effect only when the principal becomes incapacitated. However, there is a major potential drawback to the springing power of attorney. In order for the power to become effective, the principal’s doctors must verify in writing that the principal is incapacitated. If that doesn’t occur, the principal’s family will have to go through the court guardianship process instead, a much costlier and more burdensome process. The better planning tool is to use a durable power of attorney that goes into effect immediately upon signing it.

One important thing to remember about using a durable power of attorney is that if the principal is incapacitated, the power of attorney must be recorded at the Register of Deeds Office in the principal’s county of residence before it is used. The power of attorney must also be recorded if the agent engages in a real estate transaction on behalf of the principal. Call the Adaramola Law Firm today at 828-348-0189 or fill out the contact form to schedule a consultation to learn more.