Basics In Plain English

Common Law Effect of Durable Powers of Attorney

      Under the old English common law, there was no such thing as a “durable” power of attorney. At common law, if you signed a power of attorney naming someone else to act on your behalf, they would have this authority only for as long as you remained competent. If you later became disabled or incompetent, the power of attorney was automatically revoked – it was not "durable."


        Recognizing that it would be extremely beneficial if the power of attorney would remain effective even if you later became physically or mentally incapacitated, various states have passed laws to change the old common law. Generally, these new laws allow for the creation of a "durable" power of attorney by simply adding special language designed to make it clear that the powers are not to be affected by your subsequent disability.

Important Limitations

If a lawyer reasonably believes that a client is at risk of substantial physical, financial or other harm unless action is taken, and that a normal client-lawyer relationship cannot be maintained because the client lacks sufficient capacity to communicate or to make adequately considered decisions in connection with the representation, then the lawyer is permitted to take protective measures deemed necessary. 
Such measures could include: consulting with family members, using a reconsideration period to permit clarification or improvement of circumstances, using voluntary surrogate decision-making tools such as durable powers of attorney or consulting with support groups, professional services, adult-protective agencies or other individuals or entities that have the ability to protect the client. In taking any protective action, the lawyer should be guided by such factors as the wishes and values of the client to the extent known, the client’s best interests and the goals of intruding into the client’s decision-making autonomy to the least extent feasible, maximizing client capacities and respecting the client’s family and social connections.

Privacy Concerns

Powers of attorney have been called “licenses to steal.” A durable power of attorney holds great potential for abuse, especially when it relaxes or waives common law restrictions on self-dealing and gifts, and limits liability to the principal. To prevent such abuse, the document should explicitly state what bills and other financial transactions the agent is authorized to handle. The agent should not commingle his or her funds with those of the person granting the power of attorney.

The Internal Revenue Service requires that a power of attorney include the principal’s Social Security number, so it may be useful to draft a special tax power of attorney to meet this requirement without divulging the principal’s Social Security number in the general power, which may need to be recorded. The IRS publishes Form 2848 for this purpose, but the form has been held to be revoked if the taxpayer becomes incapacitated.