The Risks of a Poorly Planned Nebraska Power of Attorney (and How to Avoid Them)

When done right, a Power of Attorney (POA) is one of the most effective tools in your Nebraska estate plan. It gives someone you trust the authority to manage your financial affairs if you become incapacitated, out of the country, or otherwise unable to act. But when done poorly—or when placed in the wrong hands—it can open the door to serious legal and financial harm.

Let’s break down why every adult should have a POA, how Nebraska law governs it, and what you need to know to make this document work for you, not against you.

What Is a Power of Attorney?

A Power of Attorney is a legal document that allows you (the principal) to appoint another person (your agent) to make decisions on your behalf. In Nebraska, POAs fall into two broad categories:

• Financial Power of Attorney (POA for property or finances)

• Health Care Power of Attorney (included in most Advance Directives)

While both are important, the financial Power of Attorney carries the most risk—because it grants someone access to your money, property, and legal affairs.

Why You Need a Financial Power of Attorney in Nebraska

Without a Power of Attorney in place, your loved ones would need to go to court to get authority to manage your affairs. This process—called a conservatorship (for finances) or guardianship (for personal decisions)—is public, time-consuming, expensive, and emotionally difficult.

With a valid Nebraska POA, your appointed agent can:

• Pay your bills and manage your accounts

• File taxes and deal with the IRS

• Sign real estate or legal documents

• Handle insurance, retirement, and investment accounts

These powers can be granted immediately or set up as “springing” powers that only activate upon incapacity. However, Nebraska law generally favors POAs that are effective immediately, to avoid delays and disputes over medical certifications.

The Risk: When Power of Attorney Authority Is Abused

Here’s where things can go wrong.

When you give someone legal authority over your finances, that person can legally move money, write checks, access bank accounts, and handle property. While Nebraska’s Uniform Power of Attorney Act (Neb. Rev. Stat. § 30-4001 et seq.) requires agents to act in good faith, in your best interest, and avoid conflicts of interest, not every agent follows the rules.

Unfortunately, abuse is more common than people think.

I’ve seen agents who:

• Use funds for personal purchases

• Transfer money to themselves or family members

• Drain accounts under the guise of “helping”

And because there’s often no built-in oversight, this misuse may not be discovered until it’s too late. Legal remedies like compelling an accounting, seeking removal, or filing a recovery action are available—but only after damage has been done.

What Makes a Nebraska Power of Attorney Legally Strong?

A legally sound POA must be:

• Properly executed under Nebraska law (signed and notarized)

• Clearly written, with detailed authority outlined

• Updated to reflect current wishes and agent availability

• Backed by thoughtful selection of your agent—someone you trust without hesitation

Generic POA templates often lack the specific powers, restrictions, and clarity Nebraska courts expect. Worse, they may not comply with Nebraska’s statutory requirements, which can render them ineffective or unenforceable.

Choose Your Agent With Caution

The most important decision in this process isn’t the form—it’s the person. Your agent should be:

• Financially responsible

• Trustworthy and ethical

• Capable of understanding complex decisions

• Willing to act only in your best interest

This is not a favor or a symbolic gesture. It’s a serious legal responsibility.

If you wouldn’t trust someone with your checkbook today, don’t name them in your Power of Attorney.

Keep It Updated—and Review It Regularly

Your Power of Attorney should evolve with your life. Revisit it if:

• Your relationship with the agent changes

• Your finances or property holdings shift

• Your health status changes

• Nebraska law is updated (as happened with the adoption of the Uniform Power of Attorney Act)

A stale POA can be just as dangerous as not having one at all.

Frequently Asked Questions

Is a Power of Attorney valid immediately in Nebraska?

Most Nebraska Powers of Attorney are effective immediately upon signing. “Springing” POAs (those that activate only upon incapacity) are allowed but can cause delays and disputes. Immediate POAs are typically more practical and legally efficient in Nebraska.

Can a Power of Attorney be misused?

Yes. If the wrong person is chosen or the document is too vague, an agent can misuse funds, transfer property, or make unauthorized decisions. Abuse is often hard to detect until significant damage has occurred.

Can I limit what my agent can do under a POA?

Absolutely. A properly drafted POA can grant or restrict specific powers, such as the ability to gift assets, sell real estate, or change beneficiaries. Working with a Nebraska estate planning attorney ensures your POA reflects your exact intentions.

Does a Power of Attorney avoid probate?

Not directly. A Power of Attorney only applies while you’re living. It ends at death. But it can avoid conservatorship during your life, which is a different court process. To avoid probate after death, you’ll need tools like trusts, beneficiary designations, or joint ownership strategies.

What happens if I don’t have a Power of Attorney?

If you become incapacitated without a valid POA, your loved ones may need to go to court for a conservatorship. This can be costly, invasive, and slow—especially during a medical crisis.