Understanding the Responsibility Conveyed in a Power of Attorney
By Crissy Dixon
A Power of Attorney is a document that lets you to pick someone who you trust to help manage your finances and property. That person is called an “agent” under the Power of Attorney. Unfortunately, there are a few problems and misunderstandings that often arise when an older person has a Power of Attorney in place.
A scenario might go as follows: a client—let’s call her Helen—comes into the office to meet with me. The client’s daughter is using the client’s funds for herself, thinking she is able to do that as her mom’s “power of attorney.” What can we do?
First, if Helen is comfortable, we can talk to her daughter and see if we can’t sort out the problem with a
Sometimes, an agent does not understand her legal obligations under a Power of Attorney. She may not realize that there are duties that come with the responsibility of being an agent (sometimes also called a “fiduciary”). Being an agent does not simply mean “what’s yours is mine”—Helen’s daughter has a duty to act only in Helen’s best interest. A good agent under a power of attorney will manage the parent’s money carefully, keep Helen’s money separate from her own, and keep detailed records.
Many Power of Attorney forms will allow you to appoint a primary agent and a back-up agent. Should you (as the client) ever become incompetent, you can require that your agent will have to provide annual records of transactions to that back-up agent. This is another way to ensure that the person you pick to help you manage your finances is acting in your best interest.
Signing a Power of Attorney does not mean that Helen can no longer manage her own money and property, so long as she is still able to make decisions. The agent is appointed to help manage finances, but it does not bar the client from acting on her own.
A person can revoke or cancel a Power of Attorney. A simple way to do this is to sign a form saying you are revoking the document and then provide a copy to the agents listed in the former Power of Attorney. It is best to have a lawyer help with this.
It is important for all adults to consider having a financial Power of Attorney document in place. Without one, your finances could end up being handled through a court process called guardianship.
Some people can get help from the Elder Law Clinic at Wake Forest School of Law. Law students get practical experience under the supervision of an attorney. During the school year, the Clinic provides free legal services.
To be a client of the Elder Law Clinic, a person must be at least age 60 and meet certain income guidelines. To apply, fill out the eligibility questionnaire at http://elder-clinic.law.wfu.edu or call the Clinic at (336) 758-5061.
Crissy Dixon is the senior student attorney at the Elder Law Clinic and the Editor-in-Chief of the Wake Forest Journal of Law & Policy. Crissy will be a May 2016 graduate of Wake Forest University School of Law and is pursuing a legal career in North Carolina.
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