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Can you ever give too much power to your power of attorney?

Even though you may not be able to explain the exact duties of a power of attorney, you may understand enough about it to know that it becomes incredibly important as a person ages and their health begins to fail. That's because a power of attorney has the right to act on behalf of someone else, meaning the power of attorney can make important decisions about the property and assets of the person who appointed them.

Most people who are familiar with estate planning will tell you to pick someone that you know and trust to be your power of attorney. As you may or may not know, there are a lot of permissions that you afford to someone when you grant them power of attorney. Finding out that they are abusing this power could leave you with a complex legal situation on your hands.

This brings us to this week's post question: can you ever give too much power to your power of attorney? By looking at our state's laws and an out-of-state case, we hope to answer this question for our Harrisburg readers. Let's take a look at the law.

In Pennsylvania, just like in many other states, a person who is appointed as power of attorney has the right to make decisions regarding real and personal property on behalf of someone else. Depending on the extent of power afford to the power of attorney, also referred to as your "agent," this can include making decisions while you're still alive as well as after you become incapacitated.

Whether you grant broad authority or place restrictions on when and how your power of attorney may act, it's important to know that your agent must always "act in accordance with your reasonable expectations to the extent actually known by your agent and, otherwise, in your best interest, act in good faith and act only within the scope of authority granted by you in the power of attorney."

If an agent acts in bad faith, such as in the recent case of Jack Johnson, an NHL defenseman for the Columbus Blue Jackets, it may be necessary to obtain legal counsel to determine whether civil litigation is necessary or not in order to recoup lost assets or terminate an agent's powers of attorney.

Source: The Pennsylvania General Assembly, "Chapter 56, Powers of Attorney, Section 5601," Accessed Dec. 26, 2014

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