Financial Power of Attorney May Not Grant as Broad Powers as You Might Think

A power of attorney authorizes a person (the attorney-in-fact) to act on behalf of another person (the principal).  Sometimes the power of attorney authorizes the attorney-in-fact to make decisions on behalf of the principal relating to the principal’s health care as well as to the principal’s non-health care, or financial, matters.  Sometimes the power may be granted only as to financial matters.  Often, the attorney-in-fact for financial matters has “all powers of absolute ownership” of the principal or the document granting the power of attorney contains language that the attorney-in-fact “shall have all the powers the principal would have if alive and competent.”  This implies that the attorney-in-fact could do anything on behalf of the principal that the principal could do.  But that is not the case in the state of Washington.

In Washington, even though a power of attorney contains either of the phrases quoted above, the attorney-in-fact does not have all of the principal’s powers.  For example, the attorney-in-fact does not have the power to make, amend, alter, or revoke the principal’s wills or codicils.  In addition, there are a number of powers the attorney-in-fact does not have unless they are specifically provided for in the document granting the power of attorney.  For example, unless specifically granted in the document, the attorney-in-fact does not have the power to change the beneficiary on the principal’s life insurance policies, to change payable on death or transfer on death beneficiary designations, to make gifts of property owned by the principal, or to disclaim property.  The Washington Legislature recently amended the law to add to the list of powers that must be specifically granted in the document in order to be effective.  If you are considering granting a financial power of attorney to someone, or updating an existing financial power of attorney, please contact Per E. Oscarsson or one of the other members of Beresford Booth’s Estate Planning & Probate Group.

Beresford Booth (425.776.4100), www.beresfordlaw.com

BERESFORD BOOTH has made this content available to the general public for informational purposes only. The information on this site is not intended to convey legal opinions or legal advice.