A general durable power of attorney gives broad powers to an agent to handle all financial matters for a specified period of time. It’s a legal document that is evidence that such a relationship is created by the principal, the person granting the rights, and the attorney-in-fact, or agent, the person to whom the rights are granted. Government agencies in charge of awarding benefits and financial institutions that must protect the information and accounts held by the principal often require a general durable power of attorney from an agent who wants access to information or property owned by the principal. The agent often takes the place of the principal, but has a fiduciary duty to act in the best interest of the principal in carrying out the duties required by the power of attorney. Some of those duties include entering into contracts, selling real estate, and tax preparation and filing.
Individuals who want to protect their assets in the event they become physically or mentally disabled or legally incapacitated often execute a general durable power of attorney. In it, an agent is named and granted rights that would ordinarily belong to the principal. Successors to the agent are named as well, just in case the agent also becomes disabled or incapacitated. The rights that are granted to the agent include those that exist at the time the document is executed and future rights that the principal may obtain. For example, if the principal is the recipient of assets transferred by a will after the durable power of attorney is executed, the agent would often obtain the rights to manage those assets without the need to amend the power of attorney signed previously by the principal.
Specific powers are often listed in the general durable power of attorney, but the rights of the agents are not limited to that list. Such powers include the right to settle debt claims, purchase insurance, and operate the principal’s business. A statement often precedes a list of specific powers enumerated by the principal.
Courts construe the agent’s power broadly, but the agent cannot exceed the scope of the powers intended. For example, the agent often cannot consent to or make decisions regarding medical treatments or health-related matters. Relatives and other interested parties acting on behalf of a principal may file lawsuits against the agent for breach of fiduciary duty for exceeding his or her scope of duties or for not faithfully executing allowed duties.