A Power of Attorney (PoA) is a crucial legal tool that allows you to appoint someone to make decisions on your behalf for financial or medical matters. While having a trusted agent can provide peace of mind, choosing the wrong person can have serious consequences.
Unfortunately, misuse of Power of Attorney authority is not uncommon and can lead to financial exploitation, family disputes, and ignored medical preferences. Understanding how to choose the right person for this role and how to protect your interests is essential.
Financial Power of Attorney: Trustworthiness and competence is key to selecting an agent
Trustworthiness and competence are the most critical factors when selecting an agent for a Financial Power of Attorney. Depending on the powers you grant them, this person will have the authority to access bank accounts, redesignate beneficiaries, and even retitle assets.
Choosing someone with a history of honesty and responsibility is essential. If you do not have a suitable candidate among family or friends, a professional fiduciary can be a strong option. These bonded and insured professionals are trained to uphold fiduciary obligations and help minimize the risk of abuse or mismanagement.
Tailoring the authority of your agent
Tailoring the authority you give to your agent can make all the difference. Some people prefer their agents to have broad powers to handle a wide range of tasks. However, it can be wise to limit their authority to specific areas, such as gifting or estate planning, to prevent misuse. If your agent is a spouse, granting full Power of Attorney powers is generally less concerning. Still, if you have any doubts about the person you appoint, it’s crucial to discuss these concerns with your attorney.
Medical Power of Attorney: Make sure your agent will abide by your wishes
The responsibilities of a medical PoA are equally significant. This person will make healthcare decisions for you if you cannot in the future. To avoid conflicts or distress, you should choose someone who fully understands and respects your medical preferences, particularly regarding end-of-life care. Open and honest communication with your medical Power of Attorney is essential. They need to know your wishes in detail, from your views on life-sustaining treatments to your preferences for comfort care at the end of life. An informed ally is far better than someone who may let their personal beliefs override your wishes.
Preventing abuse of Power of Attorney authority
Abuse of Power of Attorney authority, unfortunately, happens more often than most people realize. Agents have been known to co-mingle funds, make unauthorized purchases, or even drain estates. These actions can come to light when other family members notice discrepancies or irregularities in financial accounts. To prevent these abuses, you can encourage oversight by other interested parties, such as adult children or trusted advisors. Regular monitoring and accounting can serve as a critical layer of protection against abuse.
An agent for a Power of Attorney is a legal duty, not a privilege
Appointing a Power of Attorney is not a privilege, but rather a serious legal duty. It requires vigilance, accountability, and a clear understanding of your needs and preferences. If someone cannot meet these expectations, it’s better to consider a professional fiduciary or seek legal advice on alternative options.
Steps to ensure your wishes are honored
Choosing the right agent for a Power of Attorney involves careful thought, open communication, and a clear understanding of the potential risks and responsibilities involved. You can ensure your interests are protected and your wishes honored, even if you can’t advocate for yourself.
If you’d like to learn more about choosing the right agent for your Power of Attorney, we are holding a webinar on this topic on February 27th at 12:30pm. In this informative session, we’ll cover:
- Understanding the role of an agent: Being an agent of a Power of Attorney is not a gift or a reward, it’s a legal duty that requires vigilance and integrity.
- Preventing financial abuse: Learn about common abuses, such as theft of funds, or unauthorized asset retitling, and how to safeguard against them.
- Selecting the right agent: Discover the key traits to look for in an agent, from trustworthiness to financial acumen. We’ll also discuss when it’s wise to appoint a professional fiduciary.
- Explaining responsibilities to family members: Clear communication is crucial to prevent misunderstandings and ensure your wishes are honored.
- Special considerations for Medical PoAs: Ensure your chosen agent aligns with your wishes for end-of-life care and medical decision-making.
