News outlets have recently reported that Senator Dianne Feinstein has given a power of attorney to her daughter. Concerns over the Senator’s mental competency have arisen as a result. For the reasons discussed in this post, appointing an agent by power of attorney does not necessarily mean that one is incompetent to handle one’s legal and financial affairs.
In New York State, there are various types of powers of attorney, governed by a provision of the General Obligations Law. In all cases, the person making the power of attorney is the principal who appoints a person or persons to act on one’s behalf, an agent. The standard form of power of attorney appoints one or two agents, who may or may not be required to act together. Up to any of fifteen legal actions can be authorized or all fifteen actions can be authorized. Some examples of the actions that could be authorized include real estate transactions, banking, insurance and tax matters. The document needs to be initialed and signed by the principal, as well as notarized and witnessed by two persons. The agent cannot be a notary or witness to the document, but the agent needs to sign a portion of the document before a notary accepting the role as agent. This type of power of attorney is effective immediately and is not dependent upon whether a person is competent.
The standard power of attorney can also limit the agent to acting with respect to a specific matter. For instance, if the principal will not be attending her house closing, she can appoint her attorney for the limited purpose of all matters required to complete a specific transaction. In this case, only some of the fifteen potential actions will be authorized. This limitation protects both the principal and the agent, since the agent cannot conduct actions beyond those required for the closing. The agent appointed could be a spouse or other relative, a friend or one’s attorney. Depending upon the closeness of the relationship and the degree of trust, the principal will decide whether the authority should be immediate or limited in any way.