Why “General Authority” in a Power of Attorney Isn’t Always Enough

If most states offer a standard, fill-in-the-blank power of attorney form, why do you still need a lawyer to draft one?

Because those forms tend to give your agent broad, general power, and general power often isn’t enough.

Courts read power of attorney documents narrowly. If the law requires a specific power to be spelled out in plain terms, a judge won’t assume your agent has it just because the document sounds broad. The document has to say it clearly, in the right words.

A recent court case shows exactly how much can go wrong when it doesn’t.

A Real-World Example

Edward Lyon spent decades contributing to retirement plans through his job. Those plans were set up to automatically pay his wife, Valerie, a survivor benefit after his death, unless Valerie agreed in writing to give that up.

Shortly before Edward died, he tried to change his beneficiaries, redirecting the money to trusts for his grandchildren instead of Valerie.

Because switching away from the survivor benefit required Valerie’s consent, her son-in-law signed the waiver on her behalf, using a power of attorney she had given him years earlier.

That power of attorney was broad. It let him manage her finances and even change beneficiaries on her own accounts. But it never specifically mentioned the right to give up a survivor annuity.

That one missing sentence made all the difference.

The court ruled that giving up a survivor benefit is such a significant decision that the law requires it to be spelled out by name, not left to a general grant of authority. Because it wasn’t, the waiver didn’t count.

By the time anyone realized the mistake, both Edward and Valerie had died, and there was no way left to fix it.

What This Means for You

A power of attorney is a tool for handling exactly the kind of decisions you hope you’ll never have to think about. That’s why it pays to be specific, not general, about what your agent can do.

A few examples of how I put this into practice:

Real estate. If your agent might need to sell or take out a loan against your home, I don’t just write “authority over real estate.” I include the actual property description from the deed, so there’s no question later about which property you meant.

Retirement accounts and beneficiaries. As the case above shows, the power to change a beneficiary is not the same as the power to give up a survivor benefit. If you want your agent to be able to do both, the document needs to say so, separately and clearly.

Other major powers. Many states, including Maryland, require certain powers, like making gifts, changing beneficiaries, or amending a trust, to be written out by name. A general statement like “my agent can handle all my finances” simply won’t cover them.

The Bottom Line

A standard form might feel like the easy, efficient choice. But as the Lyon family learned, that convenience can turn into a costly gap when it matters most.

The safest approach is also the simplest: if a power matters, name it.

Evan J. Krame