Many times, clients name someone they trust as the agent in their power of attorney. It’s often a new role for some people; they’re unsure of what’s expected of them and what it means for them and their relationship with our client. If you have recently been named as an agent under a power of attorney, here are a few important truths about this new role. Of course, the first thing you should do is read the document so that you understand the duties associated with managing the principal’s decisions in either a financial or medical power of attorney.
Your Role in the Power of Attorney
First, don’t let the verbiage confuse you. An “agent” or “attorney in fact” are used interchangeably. It is simply a person named by another to manage the other person’s medical or financial affairs if that person is unable to do so. That person making the designation is called the “principal.” When the agent accepts the responsibility and authority granted under the power of attorney, a legal relationship is created between the agent and principal, complete with legal duties on the agent. Keep in mind – this role is voluntary and if you are uncomfortable in taking it, you should decline when asked.
The document will spell out the details, such as when the power of attorney takes effect.
If it’s a springing power of attorney , it takes effect if and when an event that’s spelled out in the document takes place. Usually, it’s when the principal becomes incapacitated and cannot make decisions for himself.
If it’s a standing power of attorney , it goes into effect when the principal signs it.
Also, there are times when a power of attorney goes into effect only if the spouse is unable to fill the role.
If you are unsure about your responsibilities, you should consult an experienced estate planning attorney. A few of your responsibilities will likely include acting in good faith and remaining diligent in your efforts, avoiding conflicts that could present as ulterior motives, making solid decisions on behalf of the principal, not overriding the wishes of the principal and keeping the principal’s documents, financial information and money separate from your own. You must maintain scrupulous records and documents and be prepared to present them when asked. These are just a few of the responsibilities you may have in your role.
There are a number of dynamics that come together to define a unique power of attorney, but that’s important; no one’s needs are served if they can’t be customized to fit the needs of the principal.
Many people fear that the power of attorney will give them too much power – and too much pressure. As the agent, your responsibilities are spelled out in the document. The person who chose you trusts you to carry out their wishes. While it’s an important role, it’s not one that should cause stress. Your role is simply to protect the one who selected you. Not only that, but in most cases, a principal may change his or her mind and revoke a power of attorney at any time. All the principal needs to do to revoke a power of attorney is send a letter to the agent notifying the agent that the appointment has been revoked.
If you’d like to learn more about powers of attorney, contact our offices today.
- The Not-So Transparent Corporate Transparency Act - March 28, 2023
- Medicaid Planning: There’s a Right Way and a Wrong Way - March 23, 2023
- Preparing Your Estate Plan: What You Need to Know - March 22, 2023