Helena, aged 78 and widowed, signed a general power of attorney ten years ago appointing her daughter as agent over her bank and investment accounts. The instrument grants broad financial authority, takes effect on signing, and says nothing at all about what is to happen if Helena loses capacity. Helena has since been diagnosed with advanced dementia and two physicians have certified in writing that she can no longer manage her own affairs. Her daughter presents the instrument to the bank and asks to move funds to pay for residential care. Assume the governing state follows the common law rule that a power of attorney is not durable unless the instrument says so. What is the legal position of that instrument now?
- AThe power terminated when Helena lost capacity, so her daughter will probably need a court-appointed conservatorship or guardianship of the estate Correct
- BThe power remains fully effective, because a general power of attorney reaches every financial matter until the principal revokes it or dies
- CThe power springs into effect only now, because an agent's authority under a general power begins when the principal is certified as incapacitated
- DThe power survives as to health care decisions only, because a general power's financial authority lapses once two physicians certify incapacity
Why A is correct: A power of attorney that lacks durability language ends by operation of law at the principal's incapacity, leaving a court-supervised conservatorship as the remaining route to authority over her assets.
Why B is wrong: The breadth of the powers granted is tempting, but breadth of subject matter and survival of incapacity are different questions; a common law agency ends when the principal loses capacity unless the document says it endures.
Why C is wrong: This describes a springing power, which is a separate drafting choice that names an incapacity trigger; this instrument took effect on signing and carries no springing clause, so nothing was waiting to be triggered.
Why D is wrong: Authority over medical decisions comes from a separate health care instrument and is never implied by a financial power, so an instrument covering accounts cannot convert itself into a medical authority on incapacity.