Who should you trust to Make Financial Decisions for you and manage your financial well-being when you are no longer able to do so? A power of attorney (POA), otherwise known as an agent to your principal, has the legal authority to represent and make decisions on your behalf. What characteristics should you look for when designating a power of attorney? No matter what type of power of attorney you seek to arrange, your potential agent must be a person you deem to be trustworthy and honorable to conduct your affairs in your best interest.
Designating a Principal:
Often the principal who designates the POA may prefer to choose a family member such as a spouse or adult child. If a family member is either unable or unwilling to take action when necessary, you may designate a reliable friend or hire professional representation to safeguard your interests effectively. Some people choose to have co-agents or name a secondary agent in the event another might pre-decease you.
Stipulations regarding the selection of a POA are minimal. The individual you select as your power of attorney must satisfy two legal criteria: they must be an adult and must not be incapacitated. There are no special qualifications regarding financial acumen or legal knowledge, and in fact, integrity is considered the most important attribute when selecting your agent.
Some questions to consider beyond your basic level of trust with this person(s) include:
- How does this person manage their own legal and financial responsibilities? Are they financially responsible? Do they lead a steady life? Are they good at making decisions under pressure?
- Will the person you select charge you a fee for their service? Typically, family members do not charge for their assistance; however, if you opt for professional representation, such as that of a financial planner or an attorney, you can expect to incur a fee for their expertise and services.
- Is the person you want to represent you willing to do so? Becoming an agent is a big responsibility to accept, and for many reasons, the person you want may not agree to serve as your agent.
Your power of attorney agent can have broad or limited legal authority to make decisions and transactions on your behalf about your property, finances, and medical care. The authority of the agent is based on the permissions you grant. If you are unhappy with your agent, you have the option to end the power of attorney relationship and establish a new one. Your power of attorney must comply with state law. When you work with us, we will make sure yours complies with all applicable laws.
There are a few misconceptions about the power of attorney.
The first is you can create a POA on your behalf after you are incapacitated.
You cannot as it is too late. To ensure the validity of your power of attorney, it is essential that your agent is designated prior to your becoming incapacitated due to illness or disability. If you do not have your POA agent legally in place and are unable to manage your affairs, it may become necessary for a court to appoint someone to act on your behalf. Individuals designated to advocate for your interests in this capacity are known as guardians, conservators, or committees, based on the regulations of your local state law. To avoid someone making decisions for you who you may not have chosen, it is imperative to have the proper power of attorney legally in place before you become incapacitated.
Another misconception is that your POA agent can make whatever financial decision they want to about your estate and that all power of attorney documents are the same.
Your selected agent, by law, has an overriding obligation known as a fiduciary obligation to make decisions in your best interests. This responsibility is why it is imperative to choose a trustworthy agent as it can help avoid challenges to and litigation of your estate. You must have full confidence in the actions your agent will take on your behalf. You can appoint different agents for different POA document functions.
We can assist you in determining the appropriate powers to assign to specific agents.
For example, you may want a different agent to handle real estate transactions on your behalf.
Selecting an agent and preparing a financial power of attorney is an important part of your overall plan. We would be happy to help you and welcome your call. Reach us at (207)848-5600 or check out our CONTACT page for more ways to reach out.
