Power of Attorney 101- Explained in Plain English

This guest post is written by a military attorney who has over 10 years’ experience as a JAG, and has drafted way too many powers of attorney in their time. The attorney has also seen the good and bad of Power of Attorneys, so the advice comes from experience. Lastly, this article does not constitute legal advice, it is merely informative in nature. If you have questions regarding a Power of Attorney, please consult an attorney or paralegal on an individual basis.  

Most military personnel and their family members will never visit a JAG office nor sit down and talk to an attorney. And…usually, that’s a good thing. However, many will have some interaction with the often used, sometimes abused, and widely confused Military Power of Attorney (POA). POAs are a wonderful tool if used properly. As a military attorney, I have seen the good, bad, and the ugly that can come from these documents. My hope is that this article can answer some basic questions, and dispel some misconceptions, about POAs.

The Military Power of Attorney: The Basics

A Power of Attorney, aka a POA is a “written instrument” that allows you (the “principal”) to authorize your agent (also known as your “attorney-in-fact”) to conduct certain business and transitions on your behalf. That is to say, with a POA, your agent basically takes your place in a transaction as if they were you. Although the agent is sometimes called an “attorney-in-fact”, it doesn’t mean they are actually an attorney or lawyer!

A POA is one of the strongest legal documents that you can give to another person. For example, as a military spouse, you may use your military servicemember’s POA to clear government quarters, ship the family car, or make a car loan in their name. Every act you perform as an agent within the authority of the POA is legally binding to the principal or the owner of the POA.

Why Is It Called A Military Power Of Attorney?

A military power of attorney is any POA done by a military lawyer, aka a JAG. Although each state has its own laws, a military power of attorney is executed under federal law (10 U.S.C. §1044(b)). It includes language to put people on notice that it may look different because it was prepared by the military but will have the same legal effect as any POA prepared and executed in accordance with the laws of the state concerned.

Are all POAs the Same?

As you probably guessed, the answer is no. Generally speaking, there are a few kinds of POAs (General, Specific, Medical, and Durable). However, Specific POAs are probably the most widely used. They only give the agent certain powers over very particular transitions. They also usually last a short amount of time, rarely more than one year, but often just a few weeks or months. So what are we talking about exactly? Well, the most common types of POAs within the military world deal with the following:

• Financial/Banking Transactions
• Signing for or clearing quarters  
• Household Good Shipments
• Motor vehicle registration, use, buying, or selling
• Child(ren): Temporary custody, school daycare enrollment, health care
• Real Estate: Sale, Purchase, Management, Closing, or Refinancing of a Property
• DEERS/ Tricare/ EFMP
• Medical Records (but not a Medical POA): Allows someone to do anything necessary for YOUR medical records, doctors, etc.
• Tax Return: Allows someone to file taxes for you

Behold, the General Power of Attorney

So now that you know what a specific POA entails, we can move on to a General POA. These pretty much give you, the agent, blanket power to do whatever you can do. They also often do not have an expiration date. Meaning once they are signed, they remain valid until revoked (more on that later) or physically destroyed.

These are very powerful and prone to abuse. So much so, that most legal personnel I know will not execute these for just anybody. Usually, a sit down with an attorney is required. Personally, I advise against executing a General POA for Servicemembers to give a buddy or a boyfriend/girlfriend. It has to be the parent or spouse, and the relationship must be mature and proven to stand time. In other words, if you got married yesterday to a person you met a few months ago, best of luck. But please don’t ask for a General POA, it’s usually a bad idea. You can still do a specific POA, just not the all-powerful general version.

So When Would I Need a Power of Attorney?

Whether you are the military spouse or the Servicemember, the military lifestyle is fast-paced and plans change unexpectedly. If your spouse is going to be away due to deployment or training, a power of attorney will keep you prepared for any situation where you might need to act on your spouse’s behalf.

But deployment is not the only time you should make a POA. Perhaps you are PCSing overseas and leaving a car behind. You probably want to give whoever is watching your car a POA. Or you are finally getting take a second honeymoon with your spouse to Hawaii (Thank you Grandparents!) What if your parents have to take the kids to the ER or sign them up for a school sport while you’re gone? Most medical providers will want a POA for your parents to make a medical decision. And schools may also require a parent or guardian to sign off on sports. With a POA, you can take care of this.

Or, say you are happily married, have kids, and don’t expect to deploy or vacay to Hawaii anytime. Well military life is great for sudden surprises, isn’t it? Giving your spouse a General POA gives you the flexibility for that person to take care of any contingency, anytime. When the unexpected happens, you don’t have to worry about getting a POA because you have already planned for that.

Sounds Awesome, So What’s the Down Side?

Power of Attorney Abuse

Remember I said that with a POA, your agent can do whatever you can legally based on what you specify in the POA. So if you give your brother a POA to take care of your car while you are gone, you could come back to find he has sold it.

Or if you give your significant other a POA over your bank account. You could soon find that they have decided to empty your account and head to Vegas and put it all on black. If they win and give it back to you, perhaps you could forgive them, but lets be real here.

If somebody uses a POA that you signed, you are on the hook for it. You gave to them. You cannot just tell a business, “well my POA was misused”. They may feel a little sorry for you, but that’s about it. Just like you can’t buy a car and then a month later come back and try to return it for a full refund, all sales with a POA are final!

That’s why it’s so important to make sure you give it to the right person, and you give a specific POA that has a time limit on it. If you find out that your POA is being misused or no longer trust the person, the easiest thing to do is ask for it back and destroy it. And if you think that rarely happens, you are wrong. Unfortunately, a POA is like a genie. Once out of the bottle, it is very hard to get back in.

Can a Power of Attorney be Canceled?

If you want to revoke, cancel, or end a POA before it expires, you must sign a Revocation of Power of Attorney. Easy enough, but the problem is that you must give a copy of the revocation to any person who might have or will possibly deal with your agent.

So let’s say you gave your buddy a POA so he could buy and finance a sensible Toyota Prius in your name so it was ready for you when you return. All of a sudden, you get word that he has been shopping for Corvettes. In order for the revocation to be effective, you would have to send a copy to any car dealership that he may try to go to with your POA. A pretty impossible feat, huh? Now you understand why I stress to whom you give the POA and only giving a specific POA (imagine what that buddy could do with a General POA!).

Anything Else I Need to Know?

When planning to give somebody a POA, remember that no business is ever legally required to accept a power of attorney (even a military power of attorney), regardless of the legality or validity of the power of attorney. Around military installations in particular, businesses can be very suspicious of POA.

Often they want to see a specific POA. In some cases, certain businesses, such as banks and other financial institutions, will only accept a POA fulfilling their specific individual standards and requirements. You can still bring the bank’s POA into a legal office and have it notarized.

Halp. I Need a POA but My Spouse is Deployed!

Don’t fret if your spouse is already deployed and they didn’t have time to sign a power of attorney or you don’t have the specific type of power of attorney you need. Your spouse will be able to work with a JAG that is also deployed to write up the power of attorney you need. However, it will be less of a headache to establish a power of attorney before your spouse deploys.

Add Fiduciary to Your Vocab

When you are named an agent in a power of attorney, if you choose to make decisions for your principal, you become a fiduciary. Fiduciaries manage money or property for someone else and they are required by law to act in the principal’s best interests, make careful decisions and keep good records.

If you make decisions that are not in the best interest of the principal, (like buying a Mustang at 28% interest with the profits from the truck they asked you to sell, and driving it around while they are deployed) you could be sued by them.

Which brings me to my closing piece of wisdom. Do not sign a POA until you are in front of a notary. They must witness you sign the document, even if they did not draft it for you. Most military legal offices have personnel who can both draft and notarize POAs for you.