A power of attorney terminates when:
- the person who made the power of attorney (the principal) revokes it
- the principal dies, or
- when it expires according to its own terms.
Revoking a Power of Attorney
As principal, you can revoke a power of attorney at any time as long as you have capacity. It’s best to revoke in writing, but most states also allow you to revoke by another action that expresses your intent to terminate the power of attorney -- for example, your intentional destruction of the document. When you revoke your power of attorney, send written notice of the revocation by certified mail to your agent (the person who is given the power to act) to ensure that it’s clear that the power is terminated. It’s also a good idea to send copies of the revocation to any third parties who may have dealt with the agent.
A Promise That the Power of Attorney Is in Effect
To provide assurance to third parties that they can rely on a power of attorney, some state laws provide an affidavit for an agent to sign, swearing that he or she has no knowledge that the power of attorney has been terminated. Such affidavits encourage acceptance by third parties, because they can treat the affidavit as conclusive proof that the power has not been revoked or terminated. If the power of attorney includes a power over real estate, the agent can also record the affidavit – this creates a public verification of the agent’s promise that (as far as he knows) the power of attorney is not terminated.
When the Agent Doesn’t Know the Principal Died
Occasionally, an agent will continue to act under a power of attorney even after the power of attorney is terminated due to the death of the principal. To protect the agent, many state statutes do not terminate the agent's authority until the agent has actual knowledge of the death. If there is a period of time when the agent continues to act under the power of attorney because he or she doesn’t know that the principal has died, the agent’s actions will be legal and binding as long as the agent continued to act in the best interest of the principal. This also protects third parties who deal with the agent and who accept the agent’s power to act, even after the principal has already died.
EXAMPLE: Sheila uses a power of attorney to give her close friend John the power to manage her personal finances, including dealing with her homeowner’s insurance. On Wednesday, Sheila passes away in a car accident, terminating the power of attorney. The hospital notifies Sheila’s estranged family about her death, but no one knows to notify John. On Thursday, John uses his power as Sheila’s agent to purchase new insurance for her home, as she had requested. Even though the power of attorney was officially terminated at the time that John bought the insurance, John’s actions will still be binding on Sheila’s estate (and the insurance company) because he did not know about her death when he acted on her behalf.
Springing Powers of Attorney – Not Effective When Principal Has Capacity
Some powers of attorney become effective only when the principal has been determined to be incapacitated. This type of power of attorney is called a “springing” power of attorney. The authority of an agent under a springing power stops when the principal regains capacity. This is not a termination of the power of attorney, because the power of attorney could go into effect again if the principal becomes incapacitated again. But renewed capacity does terminate the agent’s power to act under the document.
Springing powers of attorney document normally contain a separate provision that defines capacity and gives a mechanism for determining when capacity has been restored -- a doctor's statement, for example. The same definition and mechanism used to trigger the agent's authority can be applied to end the authority upon the principal's recovery of capacity.
An Attorney Can Help
You can make some simple powers of attorney yourself. But if you have a complicated situation, or just want to get some personalized advice, see a good estate planning attorney for help.
Questions for Your Attorney
- I don’t think my father’s agent is doing a good job. Can I have him removed?
- How do I make my power of attorney end on a certain date?
- How do health care powers of attorney differ from from financial powers of attorney?