A Power of Attorney Is One of the Most Powerful Documents You Will Ever Sign

A Power of Attorney is an important part of a comprehensive estate plan—but it is also one of the most powerful legal documents you may ever sign.

When you name someone as your financial agent under a Power of Attorney, you may be giving that person significant authority over your money and property. Depending on how the document is written, your agent may be able to access bank accounts, pay bills, manage investments, handle business interests, buy or sell property, sign contracts, and conduct other financial transactions on your behalf.

That is why choosing the right person is just as important as signing the document itself.

Georgia Law Requires Your Agent to Protect You

Georgia’s Power of Attorney Act, O.C.G.A. Title 10, Chapter 6B, imposes legal duties on an agent.

Under Georgia law, an agent must act according to the principal’s reasonable expectations when known and otherwise in the principal’s best interest. The agent must act in good faith and stay within the authority granted by the Power of Attorney. Unless the document provides otherwise, the agent also has duties that include acting loyally for the principal’s benefit, avoiding conflicts of interest, acting with care, competence and diligence, and keeping records of receipts, disbursements and transactions. O.C.G.A. §§ 10-6B-14 and 10-6B-70.

An agent who violates these duties or acts outside the authority granted by the Power of Attorney may be held responsible for resulting damages.

Choose Your Agent Carefully

Do not choose someone simply because they are your oldest child, closest relative, or the person who lives nearby. Choose someone who is trustworthy, responsible with money, organized, and willing to respect your wishes.

Remember: Authority does not equal ownership. Your agent is acting on your behalf. Your money remains your money, and your property remains your property.

Build Safeguards Into Your Power of Attorney

A Power of Attorney does not have to give someone unlimited authority. A carefully prepared document can include safeguards appropriate for your circumstances.

You may want to limit gifting authority, restrict transfers to the agent, control the ability to change beneficiary designations, require detailed financial records, authorize another trusted person to request an accounting, name successor agents, and carefully define the agent’s authority over real estate, trusts, businesses and other significant assets.

You Can Revoke Your Power of Attorney

As long as you have the legal capacity to do so, you are not necessarily stuck with the person you originally selected.

Under O.C.G.A. § 10-6B-10, a Power of Attorney terminates when the principal revokes it, and an individual agent’s authority terminates when the principal revokes that agent’s authority.

There is an important practical issue, however: revoking the document is only part of the process. You also need to make sure the appropriate people know about the revocation.

Georgia law provides that termination of a Power of Attorney or an agent’s authority generally is not effective against an agent or third party who, without actual knowledge of the termination, acts in good faith under the Power of Attorney. Those actions may continue to bind the principal. O.C.G.A. § 10-6B-10(d).

For that reason, when a Power of Attorney is revoked, consider promptly notifying the former agent and financial institutions or other third parties that may have relied upon the document.

Georgia law also specifically allows a principal who sends notice of revocation to the agent by certified mail or statutory overnight delivery to file the notice and evidence of its receipt with the Clerk of Superior Court in the county where the principal is domiciled. This can help establish that the former agent had knowledge of the revocation. O.C.G.A. § 10-6B-10(g).

Another important point: Simply signing a new Power of Attorney does not automatically revoke an older one. Under O.C.G.A. § 10-6B-10(f), the later POA must provide that the prior Power of Attorney or all prior Powers of Attorney is revoked if that is the principal’s intention.

Banks and Other Third Parties Have Obligations Too

Georgia law also addresses what happens when an agent presents a Power of Attorney to a bank or another third party.

Under O.C.G.A. § 10-6B-19, a third party that accepts an appropriately attested Power of Attorney in good faith and without actual knowledge that it is invalid, terminated, or being improperly exercised may generally rely on it. The third party may also request certain additional information, including an agent’s certification, an English translation, or, in appropriate circumstances, an attorney’s opinion regarding a legal issue involving the Power of Attorney.

Georgia provides additional protections for qualifying statutory-form Powers of Attorney. Under O.C.G.A. § 10-6B-20, a person generally must either accept an attested statutory-form POA or request permitted additional documentation within seven business days after it is presented. If permitted additional documentation is requested, the POA generally must be accepted within five business days after that information is received. A third party also generally cannot insist that its own different POA form be used instead.

There are exceptions. For example, a third party may have grounds to refuse the POA if it has actual knowledge that the authority has terminated, has a good-faith belief that the POA is invalid or does not authorize the requested transaction, or has knowledge of a report to protective services based on a good-faith belief that the principal may be experiencing abuse, neglect or financial exploitation.

A person who improperly refuses a qualifying statutory-form Power of Attorney can potentially be ordered by a court to accept it and may be responsible for reasonable attorney’s fees and litigation expenses incurred in proceedings confirming its validity or requiring acceptance. O.C.G.A. § 10-6B-20(e).

Don’t Wait Until There Is a Crisis

The best time to decide who should control your finances and what safeguards should apply is while you are healthy and able to make those decisions yourself.

A properly prepared Power of Attorney can help your family manage your affairs without unnecessary court involvement if you become incapacitated. But the document should reflect who you trust, exactly how much authority you want to give that person, and what protections you want in place.

A Power of Attorney is one of the most powerful documents you will ever sign. You are giving another person legal authority to handle your money and property. Choose that person carefully and build safeguards into the document before you need it.

At Bowman Law Firm, our Norcross power of attorney lawyers are dedicated to helping you create a legally sound document that provides security and peace of mind. Contact us today for a consultation and ensure your affairs are managed according to your wishes.