Can I Revoke a Power of Attorney?

I wanted to cover something of a follow-up to last week’s blog entry entitled Why Won’t My Power of Attorney Work which you can find here: https://www.galliganmanning.com/why-wont-my-power-of-attorney-work/.  In that article I talked about limitations to powers of attorney and scenarios when they won’t work or at least not well.  In this article, I want to briefly address how to revoke a power of attorney.  The recent article from nwi.com entitled  “Estate Planning: Revoking a power of attorney” also addresses this topic.

A Power of Attorney (POA) is a document that allows another person to act on your behalf. The person designated is referred to as the “Attorney in Fact” or the “Agent.”  However, sometimes a family faces difficulty because the choice of agent no longer makes sense, or perhaps was only needed for a brief time.  Even worse, the family may determine the agent is a bad actor whose authority needs to end.

If the creator of the POA wants to revoke it, they have to do so in writing.  They should also identify the person who is to be revoked as the POA and must be signed by the person who is revoking the POA.

Here’s the tricky part: the agent has to know it’s been revoked.  Unless the agent has actual knowledge of the revocation, they may continue to use the POA and financial institutions may continue to accept it.  If you are revoking a power of attorney because the agent isn’t suitable or a bad actor, you have a problem.  You can’t slip off to your estate planning lawyer’s office, revoke the POA and hope the person will never know.

Another way to revoke a POA, and this is the preferred method, is to execute a new one. In most states, most durable POAs include a provision that the new POA revokes any prior POAs. By executing a new POA that revokes the prior ones, you have a valid revocation that is in writing and signed by the principal.

If you already had an acting agent and you created the new POA, send them a copy and retain proof that you did so to demonstrate they were aware of the new POA and new appointment.

If the POA has been recorded for any reason such as use in a real estate transaction, the revocation should reference that fact and should be recorded just as a new POA would be filed to replace the old one. If the POA has been provided to any individuals or financial institutions, such as banks, life insurance companies, financial advisors, etc., they will need to be properly notified that it has been revoked or replaced.

Two cautions: not telling the bad and having her find out after the principal has passed or is incapacitated might be a painful blow, with no resolution. Telling the person during lifetime and before there are issues is a good idea. A diplomatic approach is best: the principal wishes to adjust her estate plan and the attorney made some recommendations, this revocation among them, should suffice.

Talk with your estate planning lawyer to ensure that the POA is changed properly, and that all POAs have been updated.

Reference: nwi.com (March 7, 2021) “Estate Planning: Revoking a power of attorney”

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