Attorney Power Of Attorney 2 — Questions and Answers
Question 1: A durable power of attorney differs from a standard power of attorney primarily because it:
- Grants broader financial powers
- Remains effective if the principal becomes incapacitated (Correct answer)
- Must be filed with the probate court
- Requires two attorneys to draft
Correct answer: Remains effective if the principal becomes incapacitated
A durable POA contains language specifying that it survives the principal's incapacity, unlike a standard POA which terminates upon incapacity.
Question 2: Which of the following events automatically terminates a power of attorney in most U.S. jurisdictions?
- The agent moves to another state
- The principal files for bankruptcy
- The death of the principal (Correct answer)
- The agent retires from their profession
Correct answer: The death of the principal
Death of the principal automatically terminates any power of attorney because the agent's authority derives solely from the living principal.
Question 3: A 'springing' power of attorney becomes effective only when:
- The attorney-in-fact accepts the appointment in writing
- A specified triggering event occurs, such as the principal's incapacity (Correct answer)
- The document is recorded in the county recorder's office
- The principal travels outside the United States
Correct answer: A specified triggering event occurs, such as the principal's incapacity
A springing POA lies dormant and activates only upon occurrence of a defined condition, most commonly the principal's mental or physical incapacity.
Question 4: Under the Uniform Power of Attorney Act (UPOAA), an agent's authority to make gifts on behalf of the principal requires:
- Only that the POA document exists and is validly executed
- Express authorization in the POA document (Correct answer)
- Approval from the principal's heirs
- A court order authorizing each gift
Correct answer: Express authorization in the POA document
Under the UPOAA, gifting authority is not implied and must be expressly granted in the POA document to prevent potential abuse.
Question 5: An agent acting under a power of attorney owes the principal which standard of care?
- A reasonable person standard only
- A fiduciary duty (Correct answer)
- A duty of good faith without any loyalty obligation
- No formal duty if acting gratuitously
Correct answer: A fiduciary duty
Agents acting under a POA owe a fiduciary duty to the principal, requiring loyalty, good faith, and acting in the principal's best interest.
Question 6: Which type of power of attorney is most appropriate for a one-time real estate closing when the principal cannot attend?
- Durable general power of attorney
- Springing power of attorney
- Limited (special) power of attorney (Correct answer)
- Healthcare power of attorney
Correct answer: Limited (special) power of attorney
A limited or special POA grants authority only for a specific transaction or purpose, making it ideal for a single real estate closing.
Question 7: If a principal wants to revoke a power of attorney, which step is most critical when the agent has used the POA to conduct business with third parties?
- Destroying all copies of the original document
- Sending written notice of revocation to known third parties who relied on the POA (Correct answer)
- Filing a revocation form with the state bar association
- Waiting 30 days after verbal notice to the agent
Correct answer: Sending written notice of revocation to known third parties who relied on the POA
Third parties who deal in good faith with an agent without notice of revocation are protected, so notifying them in writing is essential to make revocation effective against them.
Attorney Power Of Attorney 2
A durable power of attorney differs from a standard power of attorney primarily because it: