How—and When—Should You Revoke a Power of Attorney?
Having a power of attorney in place is an essential part of your estate plan. A power of attorney can seamlessly transfer to a person you trust the authority to make decisions or transact business on your behalf as needed. You can have a power of attorney for financial matters or for health care. It can be effective immediately if you choose, or not take effect until you are incapacitated. Essentially, this document gives you control over who will manage your interests if you can't, and spare your family the cumbersome process of seeking guardianship over you if you are legally incapable of making your own decisions. But when should you revoke a power of attorney?
While it's good to have a power of attorney, the person you've chosen to hold that power, known as your agent, may need to change. Perhaps the person you intended to act on your behalf has moved away or is too ill or busy to accept this responsibility. Or, for whatever reason, you may decide that you don't trust the person as you once thought you did, or don't feel like they're the best fit for your needs.
It's important to be honest with yourself about this issue. When you choose an agent, you are entrusting them with your financial and perhaps your personal well-being. A financial power of attorney, depending on how it's drafted, may give your agent unlimited access to all of your assets. If your agent is trustworthy, this is not a problem; they will respect their duty to act in your best interests. But if there's any reason you don't completely trust your agent, or if you've identified a more suitable agent, you should consider revoking the power of attorney.
Steps to Take in Revoking a Power of Attorney
Technically speaking, revoking a power of attorney is not difficult. You can do it in a document that contains your legal name, a statement that you are of sound mind, and an unequivocal statement that you are revoking the power of attorney, giving the date on which the revocation is effective. The revocation should specify the date that the power of attorney now being revoked was executed, along with the name of the agent whose power is being removed. You should use your ordinary signature and sign in the presence of a notary public. This will put to rest any potential challenges to the validity of your signature.
Unless there is absolutely no chance that you will need a new power of attorney (such as if the power of attorney being revoked was for a specific, limited purpose that is now met), you should execute a new power of attorney with the name of your new agent at the same time you execute a revocation. Ideally, your new power of attorney documents will indicate that all prior powers of attorney are revoked.
Simply executing a revocation and a new power of attorney is not enough, however. You must communicate the revocation to all parties who may be affected by it. Naturally, this includes the agent of the recently-revoked power of attorney. This is more than just a courtesy: if you fail to notify your agent of the revocation, he or she is not liable to you for any actions they took in good faith on your behalf while they believed they had authority to do so. For instance, if you signed a revocation on Monday but did not tell the agent about the revocation of their power, and they signed a contract on your behalf on Tuesday, you would be bound by the terms of the contract and could not take legal action against the agent for entering into it.
You can call your former agent to notify them of the revocation, but you should also notify them in writing. Sending a letter with return receipt requested will offer you proof not only that the agent was given notice of the revocation, but when it was received.
Notifying Third Parties of a Revoked Power of Attorney
In addition to notifying your former agent, you must also notify relevant third parties of your revoked power of attorney. Essentially, any third party with whom you filed the original power of attorney, such as a bank, must also receive notice of the revocation. While you may send this notification by mail, it may be worth making a personal appearance to hand over a copy of the revocation if you want the third party to be immediately aware of it. If your agent acts under the power of attorney after it's revoked, and the third party with whom the agent is dealing is unaware of the revocation, that third party cannot be held liable to you for any losses that result.
If your former agent engaged in any real estate dealings on your behalf in Ohio, such as mortgaging, buying, or selling real estate, the power of attorney granting them authority is filed in the land records for the Ohio county in which the property in question is located. Don't overlook the need to file the revocation with these records departments, as well.
In short, anyone who needed to know that your former agent had authority to act on your behalf now needs to know that they no longer do.
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