Ch 10: Powers of Attorney

Question 1

What is a power of attorney? (T)

Answer 1

A power of attorney is an authorization to act on someone else’s behalf in a legal or business matter. The person authorizing the other to act is the principal, and the one authorized to act is the agent.

Question 2

What are the requirements for a valid power of attorney? (T)

Answer 2

To be valid, a power of attorney must be in writing, signed, and dated. The principal must be mentally competent when she signs it.

Question 3

What is a general power of attorney? (T)

Answer 3

A general power of attorney allows an agent to handle all affairs during a period of time when the principal is unable to do so.

Question 4

What is a special power of attorney? (T)

Answer 4

A special power of attorney limits the powers to a specific function and duration, such as selling a particular piece of property when the principal is traveling or otherwise unavailable.

Question 5

What is an advance healthcare directive? (T)

Answer 5

An advance healthcare directive may encompass a living will, a durable power of attorney for healthcare, or both.

Question 6

What is a living will? (T)

Answer 6

A living will dictates to a medical provider the healthcare that an individual wants if she is unable to make those wants known.

Question 7

What is a healthcare power of attorney? (T)

Answer 7

A healthcare power of attorney appoints an agent to make healthcare decisions on the principal’s behalf if she becomes unconscious, mentally incompetent, or otherwise unable to make decisions. Unlike other powers of attorney, a healthcare power of attorney becomes effective upon incapacitation of the principal.

Question 8

What are the requirements for the execution of an advance healthcare directive? (T)

Answer 8

An advance healthcare directive must be in writing, signed by the individual who will receive the care, and either witnessed by at least two individuals or notarized.

Question 9

When may an individual revoke an advance healthcare directive? (T)

Answer 9

In most states, an individual may revoke an advance healthcare directive at any time.

Question 10

How long does a power of attorney last for? (T)

Answer 10

The power continues to be effective even if the grantor becomes incapacitated but ends when the grantor dies. The power can expressly provide that it is not durable, in which case it is terminated by the incapacity of the principal.

Question 11

What duties does an agent with power of attorney have? (T)

Answer 11

An agent has the following fiduciary duties:

Exercise the powers for the benefit of the principal and in accordance with the principal’s reasonable expectations;

ii) Act in good faith;

iii) Separate the assets of the principal from the agent;

iv) Exercise reasonable care, competence, and diligence;

v) Account for all transactions made on the principal’s behalf; and

vi) File an accounting of his administration when directed by the court.