In legal terms, a Power of Attorney generally refers to any document that grants a person—known as the “agent”— legal authority to make decisions on behalf of another person—known as the “principal” or “grantor.”
Powers of attorney come in numerous forms, but they are most often used to grant power to make decisions regarding either a principal’s healthcare or finances when they are unable to do so, such as in a situation when the principal is incapacitated due to an accident or illness.
For both the financial power of attorney and healthcare power of attorney, it is vital that you choose wisely when selecting your agent. In this blog, we will detail seven things you should consider before selecting your agent for a financial power of attorney.
A financial power of attorney grants far-reaching powers to an individual over most or all of your finances. You can imagine how important it is that you completely trust this person to make these financial decisions for you in a responsible manner that effectively reflects the decisions you would have made yourself.
2) Financial Competence
Your agent may have to make complex decisions and financial moves on your behalf involving a business or securities or some other monetary situation. It is vital that this person be financially competent. You may completely trust your spouse to make financial decisions for you, but if they are not very well-versed in certain aspects of your finances, they may not be the best option for your financial power of attorney agent. You may prefer to select a professional such as an attorney or accountant.
3) Power of Attorney for Healthcare
Will you also grant this same agent power of attorney over your healthcare decisions? It is not required that your financial and healthcare agents be the same person, so you may decide that you prefer separate agents. If you do have separate agents, however, it is important that you select people who can work well together. If you are incapacitated in the hospital, both your finances and your healthcare decisions will need to be made in concert with one another.
4) Potential Conflict
Will there be potential conflict over the financial decisions being made? If so, you will want to select an agent who can handle the conflict and stand up to those who may try to prevent them from fulfilling your financial wishes. You may even decide, if you suspect there will be conflict, that a conservatorship would be a better route than a power of attorney since there will be court oversight to help handle the conflict.
If you elect to name a professional as your agent, such as an attorney or accountant, there will be costs associated with hiring such a person. You may receive better care of your finances due to their professional knowledge, but make sure you can afford it.
6) Potential Alternate
You should always select an alternate agent who will step in if your first choice is unavailable for any reason. Consider all of the same factors as we’ve listed above when selecting your alternate.
Your agent has to be willing to fulfill the duties associated with being granted powers of attorney. They could be the perfect person and fulfill all your criteria for a prospective agent, but if they are unwilling then you will have to choose someone else.
If you are interested in creating a Power of Attorney, or would like to learn more, please contact the law office of Duncan Legal PC today.