If you are named as the agent on a loved one’s power of attorney, you will have great responsibility. When the power of attorney is activated, there are a few things you’ll need to know, as being prepared can help you fulfill your role as an agent. From understanding the types of decisions you’re responsible for to knowing the duration of your responsibility, keeping accurate records, and more, here, we’re offering a list of what you need to know.
Understand the scope of your authority
A principal benefits from the provisions of the power of attorney document, and the agent carries out the responsibilities outlined in it on behalf of the principal. For example, if your mother creates a power of attorney document and selects you to make decisions on her behalf once the power of attorney is activated, she is the principal and you are the agent.
You must understand the scope of your authority as a power of attorney. You are not granted unlimited power. The power of attorney document should outline the actions you are permitted to take.
Keep in mind that different types of powers of attorney give different authority. For example, it is possible that through a health care power of attorney, the principal gives an agent the right to make health care decisions but retains control over their own financial decisions.
A power of attorney can be revoked
Having a valid power of attorney in place does not give the agent infinite authority, so be careful not to overstep. A principal can revoke or modify a power of attorney at any time as long as they are mentally competent. To revoke a power of attorney, the principal needs to create another document and notify each institution that is aware of the power of attorney of the change.
As an agent, when you learn that the principal has revoked the power of attorney, you should stop acting on their behalf immediately.
Know your legal responsibilities and liability
The main fiduciary duties that an agent owes to the principal include the duties of care, acting in the best interest of the principal, and avoiding self-dealing. This means that agents must put the interests of the principal before their own and not use their capacity as agents for personal gain.
You can be held legally responsible for any actions you take that are not in the principal’s best interests or that are in violation of state or federal law. Misusing the authority you were granted, especially for personal gain, or neglecting your duties can result in legal consequences.
Always consult with an attorney if you are unsure about your responsibilities or feel the situation is too complex.
Know how long your responsibilities last
Note the duration of the power of attorney. The agent has authority only for the time outlined in the terms of the power of attorney. The authority typically continues until the power of attorney is revoked or the principal passes away.
You have rights to certain information about the principal
An agent has the right to collect information regarding the principal in their capacity as an agent. As the agent, you have the right to access the principal’s financial records, medical records, and other information necessary to make decisions on their behalf. However, your access is limited to the scope of your authority as outlined in the power of attorney.
Identify and avoid conflicts of interest
You should avoid conflicts of interest and ensure that personal relationships or external pressures do not influence your decisions. If you feel unsure about a decision or how to proceed in a difficult situation, consider consulting with family members, legal counsel, or financial advisors to make sure you are doing what is best for the principal.
Keep organized records of your actions
Keep complete and accurate records of every action you take on behalf of the principal, including financial transactions, medical decisions, and any other decisions made. These records are essential to show that you acted responsibly and in the principal’s best interests if necessary.
You might run into challenges after the power of attorney is activated
Agents should be aware of the challenges they could face when they try to exercise their authority to make decisions on behalf of the principal. Agents might find themselves facing resistance and difficulty accessing information or financial accounts. Here are some hurdles that agents can expect to encounter:
- Trouble accessing medical records: As the agent for an aging person, you might need to access their medical records. If the agent has a health care power of attorney, some health care providers may be reluctant to release information or act on the agent’s instructions without additional verification, particularly if the principal is still mentally capable.
- Institutional resistance: An agent might face institutional resistance in serving the principal. Some banks, insurance companies, or other institutions may not recognize the power of attorney, especially if it is not properly notarized. It is crucial to have an original and properly notarized power of attorney before you start trying to exercise any authority.
- Problems with banking or financial access: A power of attorney can give you the ability to access the principal’s bank account or other financial resources. However, some financial institutions may require additional documentation that might cause delays. Banks may also be unwilling to accept the power of attorney or may ask for more verification of the agent’s authority.
Being a loved one’s agent under a power of attorney is a serious responsibility. Although after the power of attorney is activated you may run into challenges, it can also be rewarding to help a loved one in this way. If you, as an agent, face difficulties, consult with an attorney to ensure you are fulfilling your duties correctly and avoiding legal pitfalls.
