5 Things a Power of Attorney Does Not Cover (and Why That Matters)
Apr 21, 2025
A power of attorney can be a powerful tool in your estate plan—but it’s not a magic wand. People often assume their power of attorney can do just about anything on their behalf, but the truth is, there are clear limits to what it covers.
Let’s break down five big things a power of attorney does not allow someone to do—and why that matters for you and your loved ones.
- Assets Titled in a Revocable Living Trust
A common misconception is that a power of attorney gives your agent control over all your assets. But if you’ve already transferred assets into a revocable living trust, your power of attorney doesn’t touch those.
Why?
Because those assets are no longer in your name—they’re owned by the trust. The only person who can manage those assets is the trustee, not your power of attorney agent. If you want someone to manage trust assets, they need to be named in your trust as a successor trustee.
âś… Plain English Tip: Your financial power of attorney and your trust should work together, but they aren’t interchangeable. Make sure your trustee and your power of attorney know their roles.
- Duties You Were Assigned as Executor of Someone Else’s Estate
Let’s say you’re named as the executor of your mother’s estate. If you later become incapacitated, your power of attorney agent cannot step in and do that job for you—even if they have broad powers.
Why?
Because being an executor is a personal appointment made by the court. It’s not something you can delegate to someone else using a power of attorney. So if your spouse, John, is your power of attorney, he can’t automatically take over your executor duties if you were appointed to handle your mom’s estate.
âś… Plain English Tip: If you're named as an executor in someone else's will, and you're no longer able to serve, the court will appoint an alternate executor or administrator—not your power of attorney.
- Duties as a Corporate Officer of a Business
If you’re the CEO or managing member of a business, your power of attorney doesn’t automatically step into your corporate shoes.
Why?
Because business decisions—especially those that bind the company—usually require specific authority granted under corporate bylaws or operating agreements. A personal power of attorney typically doesn’t give someone the legal standing to act as a corporate officer.
âś… Plain English Tip: If you own a business, talk to your attorney about a business continuity plan or corporate resolution that spells out who can act if you’re incapacitated.
- Bank Accounts That Require the Bank’s Specific Power of Attorney Form
Some banks are picky. They may refuse to honor a general power of attorney unless it’s on their form.
Why?
Banks do this to protect themselves from liability. If your power of attorney doesn’t look familiar or contain their specific language, they might reject it—even if it’s perfectly valid under state law.
âś… Plain English Tip: Once you’ve signed your power of attorney, take it to your bank. Ask if they’ll honor it—or if they require their own version. If they do, fill it out. Better to deal with it now than in a crisis.
- Transactions After the Principal Has Died
Once the person who created the power of attorney (that’s the “principal”) dies, the power of attorney is automatically revoked.
Why?
Because the power of attorney is only meant to help during life. After death, legal authority shifts to the executor or trustee named in your estate plan. Any action taken under a power of attorney after the principal has died is invalid—and potentially illegal.
âś… Plain English Tip: Make sure your family knows that your power of attorney ends at death. No one should be trying to close accounts or move funds using a POA after you're gone.
Wrapping It Up
A power of attorney is a critical part of your estate plan—but it has limits. It doesn’t cover everything, and misunderstanding those limits can lead to delays, rejections, and even legal trouble.
If you haven’t reviewed your power of attorney in a few years, or if you’re not sure how it fits with your trust, will, and business plans, now’s the time.
Need help getting it all sorted? Visit www.LivingTrustLawFirm.com to schedule a no-fluff phone consultation that’ll get you on your way.
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