A durable power of attorney cannot do several important things: it cannot authorize medical decisions, it cannot be used to make or change a will, it cannot be used for the agent’s personal benefit, it cannot override a court-appointed guardian, and it cannot be used for anything at all once the principal dies. Within financial matters, where its authority is broadest, the agent still faces hard limits on gifts, self-dealing, beneficiary changes, and trust modifications unless the document specifically grants those powers.
It Does Not Cover Healthcare Decisions
A standard durable power of attorney covers financial and legal matters only. It gives the agent no right to consent to surgery, choose a care facility, direct end-of-life treatment, or make any other medical decision. Those powers come from a separate document, usually called a healthcare proxy, medical power of attorney, or durable power of attorney for healthcare decisions.
A family member who shows up at a hospital holding only a financial power of attorney will be turned away. Hospitals follow the healthcare directive, not the financial one. If no healthcare directive exists and the principal is incapacitated, the family may have to petition a court for guardianship before medical decisions can be made, which takes time an emergency does not provide.
The two documents can name different people, and some principals deliberately split the roles. Both should be prepared together so there are no gaps.
Personal Acts the Agent Cannot Perform
Some decisions are so tied to the principal’s identity that the law treats them as non-delegable, regardless of how broadly the document is drafted.
- The agent cannot make, amend, or revoke the principal’s will. A will must reflect the personal wishes of the testator, who must have testamentary capacity and intent at the moment of signing. No agent can stand in for that.
- The agent cannot vote in any public election on behalf of the principal. Voting is a personal civic right and cannot be exercised by proxy.
- The agent cannot perform a personal service contract the principal owes. If the principal is obligated to do work that depends on their own skill or effort, such as an employment agreement or a contract for creative services, the agent cannot step in to fulfill it.
A power of attorney delegates authority over property and transactions. It does not delegate the principal’s identity.
Financial Limits Inside the Agent’s Authority
No Self-Dealing
An agent cannot use the principal’s assets for personal benefit. Transferring the principal’s property to the agent’s own name, paying the agent’s debts with the principal’s money, lending the principal’s funds to the agent’s relatives, or steering the principal’s business to companies the agent has a stake in all qualify as self-dealing. Under the Uniform Power of Attorney Act, which most states follow, the default rule bars the agent from creating any interest in the principal’s property for themselves or their dependents unless the document specifically authorizes it.
The rule is strict enough that even transactions where the principal would arguably benefit can be challenged if the agent also benefits. An agent who buys the principal’s house at fair market value still has the problem of sitting on both sides of the deal. Courts scrutinize these transactions, and the agent carries the burden of proving the deal was fair.
Gifts Are Tightly Restricted
An agent generally cannot give away the principal’s money or property unless the power of attorney specifically grants gift-making authority. Even where that authority exists, most states cap gifts at the federal annual gift tax exclusion, which is $19,000 per recipient for 2026.1Internal Revenue Service. Frequently Asked Questions on Gift Taxes Married couples who split gifts can reach $38,000 per recipient.
Gift-making authority is designed to let the agent continue a pattern the principal already established, such as annual holiday gifts to grandchildren or ongoing donations to a familiar charity. It is not a license to redistribute the estate. An agent who makes large gifts that deplete the principal’s resources, or gifts that happen to benefit the agent’s own family, is a prime target for a breach-of-fiduciary-duty claim.
No Changing Beneficiaries or Trusts Without Specific Authority
The agent cannot change who inherits the principal’s life insurance, retirement accounts, or payable-on-death bank accounts unless the document specifically allows it. These designations pass assets outside of probate, so an unauthorized change can redirect large sums without anyone noticing until the principal dies. Most states require any grant of this authority to be explicit and specific, not implied from a general grant of financial power.
The same logic applies to trusts. An agent cannot create, amend, or revoke a trust for the principal unless the power of attorney or the trust itself expressly provides that authority. Trusts are often the backbone of an estate plan, and letting the agent restructure one without clear authorization would effectively let the agent rewrite the inheritance plan.
It Does Not Automatically Allow IRS Representation
A general durable power of attorney does not by itself let the agent represent the principal before the IRS. Tax representation runs through its own authorization process built around Form 2848, Power of Attorney and Declaration of Representative.2Internal Revenue Service. About Form 2848, Power of Attorney and Declaration of Representative
The IRS will accept a non-IRS power of attorney in some circumstances, particularly when the principal is incapacitated and cannot sign Form 2848. The document must contain specific information required by IRS regulations, and the agent may still need to attach a completed Form 2848 for the authorization to be recorded.3Internal Revenue Service. Instructions for Form 2848 If the durable power of attorney was not drafted with tax representation in mind, it may be useless at the IRS, and the family may need a court-appointed guardian or conservator before anyone can handle the principal’s taxes.4Internal Revenue Service. Using a Durable Power of Attorney in Tax Matters
Divorce and Guardianship Can Strip the Agent’s Power
If the principal named a spouse as agent and the couple later divorces, the power of attorney may be automatically revoked. Roughly a dozen states terminate the agent’s authority the moment a divorce action is filed or finalized. In those states, the ex-spouse loses all power to act under the document without any additional paperwork. In states without an automatic revocation rule, the document technically remains valid until the principal revokes it, which is easy to overlook during a divorce.
Anyone going through a divorce should review their durable power of attorney immediately and execute a new one if the current agent is the soon-to-be ex-spouse. Waiting until the decree is final leaves a window where the estranged spouse still has legal control over the principal’s finances.
A court-appointed guardian or conservator can also override the agent. Courts step in when the agent is suspected of mismanagement, when the agent and family disagree about the principal’s care, or when the principal’s circumstances have gone beyond what a power of attorney was designed to handle. Once a guardian is appointed, the agent generally serves at the guardian’s discretion, and the guardian can limit, direct, or terminate the agent’s authority entirely.
Authority Ends the Moment the Principal Dies
A durable power of attorney terminates instantly when the principal dies. No grace period. No court order required. The agent’s power to write checks, transfer assets, pay bills, or do anything else on behalf of the principal simply vanishes.
This catches families off guard more than almost any other limitation. An agent who has managed a parent’s finances for years will find that banks freeze the accounts as soon as a death certificate is on file. The agent cannot pay funeral expenses, settle outstanding medical bills, or distribute assets to heirs. Those responsibilities shift to the executor named in the will or, if there is no will, to a court-appointed administrator through probate.
An agent who keeps using the principal’s funds after death, even for something that looks legitimate like paying for the funeral, risks personal liability and potential criminal exposure. The proper course is to stop all transactions immediately and let the executor take over.
Consequences When an Agent Oversteps
Family members, beneficiaries, and other interested parties can petition a court to review an agent’s conduct, and courts take these petitions seriously when the principal is incapacitated and cannot speak up.
If a court finds a breach of fiduciary duty, the remedies are substantial. The court can order the agent to return misappropriated property, pay restitution, and produce a full accounting of every transaction. The agent can be held personally liable for the loss, removed from the role, and permanently barred from acting under the power of attorney.
The consequences reach beyond civil liability. Every state criminalizes some form of elder financial exploitation, and an agent who steals from or defrauds an incapacitated principal fits squarely within those statutes.5U.S. Department of Justice. Elder Abuse and Elder Financial Exploitation Statutes Depending on the amount involved and the victim’s vulnerability, the agent can face felony charges with significant prison time. Prosecutors do not need a complaint from the principal. A concerned family member, a bank’s suspicious-activity report, or an adult protective services investigation can trigger a criminal case.