A Power of Attorney (POA) document is a common estate planning tool. Whether it’s classified as General, Durable, Non-Durable, Medical, Limited, or Conditional, every POA is advance preparation to take care of you should something happen that prohibits you from taking care of yourself.
Every POA names an agent and gives that person the authority to act on your behalf. The POA may grant broad powers to handle all your financial and business matters, it might be limited to a specific purpose, such as handling a specific bank account, or it could be arranging for your healthcare.
The position of agent comes with responsibilities that should be considered before you agree to serve as agent of any Power of Attorney.
The agent’s primary duty is to abide by the terms outlined in the POA.
- If the document lists specific instructions regarding the actions the agent should take, the agent must follow those directions. It’s good practice for you to discuss and confirm in writing any expectations you have for the agent.
- The agent must act in your best interest, rather than in their own interest.
- The agent must avoid conflicts of interest.
- The agent cannot commingle or combine their own property with the principal’s property, unless you and the agent jointly owned the property before drafting the power of attorney, as in the case of a husband and wife.
Additionally, there is a Uniform Power of Attorney Act that has been adopted in 26 states which says:
- The agent must keep records of all transactions made under the POA.
- The agent must provide copies of records, in a timely manner, to any family member or interested party who requests them.
- If the agent fails to provide satisfactory records promptly, family members can ask a court to intervene and order the records be provided.
In all states, once a court decides that an agent isn’t carrying out the required duties, it appoints a professional fiduciary as agent. Professional fiduciaries are well versed in the duties of agent and they charge a fee for their services.
If asked to serve as agent for a POA, it’s easy to say, “Oh, sure. I’ll do that.” But understand the rules and accountability of that position before you agree.
This article is presented as information only and should not be considered as legal advice.