What Rights Does a Durable Power of Attorney Have?

Planning for the future often involves considering scenarios where you might be unable to make important decisions for yourself. A durable power of attorney (DPOA) is a crucial legal document that allows you to appoint someone you trust — known as an agent — to manage your affairs if you become incapacitated. But what exactly can this agent do? Understanding the scope of their rights and limitations is essential for both the person creating the DPOA (the principal) and the agent they appoint.

The Law Offices of Diron Rutty, LLC, will explain the specific rights a durable power of attorney agent holds in New York. We’ll cover their authority over financial, legal, and healthcare matters, as well as the important boundaries they must respect. Knowing these details ensures your wishes are honored and your affairs are managed correctly, providing peace of mind for everyone involved.

Financial and Legal Rights of a DPOA Agent

When a durable power of attorney is effective, the agent gains significant control over the principal’s financial and legal life. The goal is to ensure that the principal’s responsibilities are managed seamlessly, even when they cannot handle them personally. In New York, these rights are extensive but must always be exercised for the principal’s benefit.

Managing Finances and Investments

One of the primary roles of a DPOA agent is to oversee the principal’s finances. This is a broad responsibility that includes several key functions:

1. Managing Bank Accounts: The agent can deposit and withdraw funds, write checks, and manage savings and checking accounts to ensure financial stability.
2. Paying Bills: From utility bills and mortgage payments to insurance premiums and credit card balances, the agent is responsible for keeping the principal’s accounts current.
3. Handling Investments: An agent has the authority to make investment decisions, such as buying or selling stocks, bonds, and mutual funds, in accordance with the principal’s best interests.

Filing Taxes and Managing Property

The agent’s authority extends to significant financial obligations and assets.

1. Filing Taxes: The agent can prepare and file federal, state, and local tax returns on behalf of the principal, ensuring all tax obligations are met on time.
2. Managing Property: This includes overseeing both real and personal property. The agent can buy, sell, lease, or mortgage real estate and manage other valuable assets as outlined in the DPOA document.
3. Conducting Business: If the principal owns a business, the agent can step in to manage its operations, make payroll, and handle other related business interests.

Accessing Legal Documents

1. An agent also has the right to access the principal’s important legal documents and act on them. This allows them to handle legal claims, hire attorneys, and represent the principal in legal proceedings if necessary.

Healthcare Decision-Making Rights

In New York, a standard durable power of attorney does not automatically grant healthcare decision-making authority. For an agent to make medical decisions, the principal must execute a separate document called a Health Care Proxy. However, a DPOA can be drafted to include specific healthcare provisions, creating a comprehensive document.

If this authority is granted, the agent can:

1. Make Medical Decisions: This includes consenting to or refusing medical treatments, surgeries, and medications.
2. Choose Care Facilities: The agent can decide where the principal receives care, such as selecting a hospital, nursing home, or assisted living facility.
3. Access Medical Records: The agent has the right to review the principal’s medical records to make informed decisions about their care.

It is vital to specify these healthcare powers clearly in the legal document to avoid confusion and ensure your medical wishes are followed.

Key Limitations of a Durable Power of Attorney

While an agent holds significant power, their authority is not unlimited. New York law places strict boundaries on what an agent can and cannot do to protect the principal from abuse and ensure their actions align with the principal’s best interests.

Fiduciary Duty to the Principal

The most important limitation is the agent’s fiduciary duty. This legal obligation requires the agent to act solely in the principal’s best interest, avoiding any conflicts of interest. The agent must manage the principal’s assets prudently and cannot use their position for personal gain. For example, they cannot transfer the principal’s property to themselves without explicit authorization.

Inability to Alter an Estate Plan

An agent’s power is confined to managing the principal’s affairs while they are alive. Key limitations include:

1. Cannot Change a Will: An agent has no authority to alter, amend, or revoke the principal’s will. The will is a separate legal document that can only be changed by the principal while they are of sound mind.
2. Power Ends at Death: The durable power of attorney automatically terminates upon the principal’s death. At that point, the executor named in the principal’s will takes over the management of the estate. The agent cannot continue to make financial transactions or decisions.
3. Cannot Transfer Authority: An agent cannot delegate their responsibilities to someone else. If the appointed agent is unable or unwilling to serve, the successor agent named in the document takes over.

Secure Your Future with Professional Guidance

Creating a durable power of attorney is a proactive step toward protecting your future, but it’s not a task to be taken lightly. The complexities of New York law and the importance of tailoring the document to your specific wishes make professional guidance essential.

Working with an experienced estate planning lawyer provides numerous benefits. At The Law Offices of Diron Rutty, LLC, we offer an extensive review of your situation to help you create an individualized plan. By providing you with the right information, we empower you to make the best choices for your future and draft documents that reflect your true intentions. 

Whether you’re just beginning your estate planning journey or need to review existing documents, our team is here to help. Contact our New York estate lawyers today to discuss your needs.