Your Durable Power of Attorney is your most important planning tool. It is the legal document that allows your chosen Agent (family member, friend, or trusted advisor) to continue your personal business if you cannot do so yourself. This includes paying your bills, accepting and depositing your income, filling out legal forms, contracts and tax returns and everything else you do every day. If you die, your Executor will handle the winding up of your affairs, but if you are alive and not able to handle your affairs, someone has to do it for you.
The first thing that you have to decide (after you realize you really need a Power of Attorney) is who should be your Agent. This is easy for some people and difficult for others. Whoever you choose, that person needs to be trustworthy. Your Agent will be handling all of your money and property. The duty of an Agent is to handle everything carefully and for your benefit, but your Agent has the ability to do things improperly and incorrectly. Your Agent has the ability to steal from you. So, you have to choose someone who is honorable and honest.
Your Agent may also have to handle complex things like investments, retirement accounts, life insurance and taxes. Your Agent may (and probably should) hire professional help, but your Agent should understand financial and legal issues. You don’t have to choose an Accountant or a Lawyer; your spouse or grown children may be able to handle the job just like they handle their own affairs. But, you don’t want to choose someone that you know has trouble handling their own financial affairs.
The next thing you need to know is that you can change your mind and revoke your Power of Attorney at any time. Giving power to an Agent (through the document called a “Power of Attorney”) is just like hiring an employee (although your Agent is generally an unpaid friend or relative). And, like an employee, you can fire your Agent at any time (as long as you are competent to do so.) But, how is this best done?
You can execute a new Power of Attorney document that names a new Agent and by its terms revokes your previous document. You can also just sign a statement that you are revoking your current document. Both types of documents should be signed in front of a Notary Public who will sign and seal the document. In a plain revocation document you would identify the Power of Attorney that you are referring to by date of execution and the name of the Agent whose power you are terminating.
Then, you will need to notify everyone, who might have had dealings with your former Agent, that that person no longer has authority to work for you. This is important because third-parties who act in good faith on a Power of Attorney are not liable to you for doing so. But, if they have been informed, then they cannot properly accept the directions of your former Agent. It is best to notify everyone in writing and you will want to notify everyone with whom your former Agent may have done business and perhaps everyone with whom you do business.
You should notify your former Agent that the power under the older document has been terminated and that your former Agent should no longer try to act for you. If possible – if your former Agent cooperates – you should get back all copies of your old Power of Attorney document. You don’t want copies of a voided document floating around.
It is best to always have a valid Power of Attorney in place. If you are unhappy with your current Agent, then you can revoke that power and create a new one. See your Elder Law or Estate Planning Attorney to get a new Power of Attorney put in place as soon as possible. If you don’t have a Power of Attorney now, then call your lawyer right away, because it is your most important legal planning tool and you need to have one.