A financial advisor recently reached out to me regarding the impact of a Power of Attorney document concerning financial matters. In particular, the question was whether the person signing the document (the “principal”) loses any power or authority once they sign the POA document.
As a reminder, the default rule (and recommended direction in my opinion) is that the agent’s power is immediate upon signing. In other words, it is not necessary to wait until the principal is incapacitated before there is authority for the agent to be able to act on behalf of the principal.
So the question is: “Once the principal signs the POA for an immediate power, does that principal lose any power/authority?” Quick answer: No.
The POA document in this scenario simply adds another individual as an authorized party to deal with accounts or other financial interests. Thus, the principal can continue to operate as normal. The principal also has the ability to remove the agent at any time and notify any third-parties that the agent’s authority has been terminated.