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5 questions to ask as you prepare to pick your power of attorney agents

by Legacy Plan
updated December 18, 2023

A power of attorney (PoA) gives another person the legal authority to make decisions on your behalf. This person is called your agent or attorney-in-fact. You can choose anyone you trust to be your agent, as long as that person is 18 years old or older and of sound mind.

There are many reasons why you might need to appoint a power of attorney. For example, if you become incapacitated and can no longer make decisions for yourself, your agent will be able to step in and make financial and medical decisions on your behalf. Or, if you’re going to be out of the country for an extended period of time, you can appoint a PoA to handle your affairs while you’re away.

Choosing the right agents is an important estate planning decision. This person will have a great deal of responsibility, so it’s important to choose someone you trust implicitly. Here are a few things to keep in mind when choosing an agent:

  • Choose someone who is responsible. Your agent will be responsible for making important decisions on your behalf, so it’s important to choose someone who is levelheaded and capable of handling this type of responsibility.

  • Choose someone who is honest. Because your agent will have access to your finances, it’s important to choose someone who is honest and trustworthy. You should feel confident that your agent will act in your best interests and not take advantage of the situation.

  • Choose someone who is organized. Your agent will need to keep track of your financial affairs and handle a variety of paperwork. Choose someone who is organized and detail-oriented to help ensure everything is taken care of.

  • Choose someone who is available. Your agent may need to make decisions on your behalf at a moment’s notice. Choose someone who is generally available and able to respond quickly to requests for information or assistance.

  • Choose someone who is knowledgeable. Ideally, your agent should have some knowledge about financial and legal matters. This will help them make informed decisions on your behalf. If you don’t have anyone in mind who fits this criteria, you may want to consider hiring a professional fiduciary.

  • Choose someone who is compatible. It’s important to choose an agent with whom you have a good relationship. This person will be making decisions on your behalf, so it’s important that you feel comfortable communicating with them and that you trust their judgment.

  • Choose someone who is willing. Not everyone is interested in serving as an agent, so be sure to ask your potential agent if they’re willing and able to take on this responsibility before you appoint them.

The bottom line is that choosing the right PoA agent is a vital decision. Be sure to take your time and choose someone you trust implicitly to help ensure your best interests are protected.

Choosing incompetent or untrustworthy agents under your powers of attorney could lead to financial abuse, improper health care, family conflict and other negative outcomes. Ask yourself these five vital questions when selecting agents to avoid appointing inappropriate candidates:

Question #1: Who will have access to your finances?

Booklet opening animation of our free requestable booklet 'Powers of Attorney - Planning fro Life Events'

First, you need to decide whether you want to give someone access to your finances now, or if you want to wait until later. If you choose to give someone access now, it's called a durable power of attorney. This means that the person you choose (called your agent) will be able to make financial decisions on your behalf even if you become incapacitated. If you choose to wait until later, you can still give someone power of attorney, but it will only take effect if you become incapacitated.

Second, you need to decide who you trust to make financial decisions on your behalf. This is a big responsibility, so you need to choose someone who you know will act in your best interests. You also need to make sure that the person you choose is financially responsible and has the ability to handle your finances.

Third, you need to think about what kind of financial decisions you want your agent to be able to make. For example, do you want them to be able to manage your bank accounts, pay your bills or make investment decisions? You'll need to specify this in your power of attorney document.

Fourth, you need to consider how long you want your agent to have power of attorney. You can give them power of attorney for a specific period of time (e.g., six months) or for the rest of your life.

Finally, you need to think about what would happen if your agent can't or won't act on your behalf. You may want to appoint a backup agent, just in case.

Question #2: What powers will your agents have?

When you are selecting agents under powers of attorney, it is important to consider what authorities you would like them to have. This will help you to narrow down your choices and find someone who is best suited for the job. There are a few different types of powers that your agent can have, and each one comes with its own set of responsibilities.

As mentioned, one type of power that your agent can have is the power to make financial decisions on your behalf. This includes managing your bank accounts, paying your bills and making investment decisions. If you give your agent this power, it is important to make sure that they are trustworthy and have your best interests at heart. Another type of power that your agent can have is the power to make medical decisions on your behalf. This includes things like deciding what treatments you should receive, consenting to surgeries and making end-of-life decisions. Again, it is important to make sure that your agent is someone you trust implicitly before giving them this power.

Finally, your agent can also have the power to make decisions about your living situation. This includes things like deciding where you should live, whether or not you should move into a nursing home, and making arrangements for your care if you become incapacitated. As with the other types of powers, it is important to select an agent you believe will make decisions in your best interests.

These are just a few of the powers that your agent can have. Ultimately, the decision of what powers to give your agent is up to you. It is important to consider what powers are most important to you and to select an agent who you trust to handle those powers responsibly.

Question #3: What is your agents’ relationship to you?

Fielding questions about our personal lives is nothing new. We get asked about our favorite color, food and movies all the time. But, when it comes to questions about our personal finances, we tend to clam up. It’s not that we don’t want to talk about it, we just don’t know where to start.

A common one is: “What is your agent’s relationship to you?” It’s a valid question, especially when you consider that this person will have a lot of control over your finances if you become incapacitated.

There are a few things you should consider when answering this question. First, you need to think about the qualifications of your agent. Do they have experience handling finances? Are they someone you trust to make sound decisions? Next, you need to consider the nature of your relationship with your agent. Are they a family member? A close friend? Someone you’ve worked with in the past?

No matter who you choose as your agent, it’s important to have a clear understanding of their qualifications and your relationship with them. Only then can you be sure that your financial and health care decisions are in good hands.

Question #4: How well does the potential agent communicate and handle conflict?

Choosing someone to manage your affairs under power of attorney is an immense responsibility. While technical skills like financial acumen or medical knowledge are crucial, an agent’s communication and conflict resolution abilities can equally determine their effectiveness. Navigating complex family dynamics or resisting undue pressure requires diplomacy and discretion. Selecting an agent lacking these relationship skills risks conflict and improper decisions down the road.

Finance and health care matters inevitably involve discussions with family members. An agent must communicate clearly and listen carefully to understand everyone’s views. Tactfully conferring with loved ones and providing transparent updates fosters trust in the agent’s impartiality. If communication breaks down, suspicions arise.

For example, an evasive agent who refuses to explain health care decisions may cause relatives to question motives. Or one who does not proactively provide financial updates to beneficiaries could appear deceptive. Prioritizing open communication promotes harmony.

Despite best efforts, disagreements between family members or challenges to the agent’s authority may occur. A diplomatic agent can calmly engage concerned parties, acknowledge differing perspectives, and explain the reasoning behind choices based on your wishes. Losing composure or stonewalling questions will escalate conflict.

An agent lacking dispute resolution skills might respond defensively to challenges rather than addressing issues transparently. Extended family may intervene if disputes disrupt relationships. Seek an agent who can thoughtfully diffuse disagreements.

Occasionally, family members, friends or acquaintances may try to influence your agent to act against your directives for their own gain. A resolute agent will stand firm against any undue pressure and uphold your wishes over external demands. Those prone to being swayed risk compromising your interests.

For example, an agent who buckles to pressure from others to liquidate assets for their own use violates their fiduciary duty. Steadfast conviction is required to protect your legal rights.

The bottom line is agents who communicate with wisdom, resolve disagreements amicably, and remain unflinching against inappropriate influence demonstrate the relationship skills necessary to effectively carry out their role. That’s why character evaluation is just as important as assessing technical qualifications. With both suitability and diplomacy, your chosen agent can avoid family friction and honor your wishes.

Question #5: Is the potential agent geographically accessible and available?

While you may have close loved ones in mind, it’s important to consider how an agent’s location and availability may impact their ability to serve effectively on your behalf. Agents who are not geographically accessible or consistently available can severely hinder response time and hands-on oversight should the need arise.

Finance and health care matters often require local presence to conduct business or visit providers in person. Agents located out-of-state or overseas will struggle to carry out important duties that require being on-site. Whether inspecting your home, accessing your safe deposit box, meeting with your doctor or simply signing documents — many critical tasks necessitate local accessibility. Distant agents risk delays responding to time-sensitive scenarios or emergencies if unable to be present quickly when required.

For example, agents living across the country cannot readily meet with your banker to access accounts or physically check on your home and care if you are hospitalized. Travel costs may also make frequent in-person support cost-prohibitive for distant agents. Local agents can handle duties more effectively.

Serving as an agent demands considerable time and active engagement. Those with inflexible schedules, frequent travel or vacations or competing priorities may be unable to devote adequate focus when called upon, even if geographically close. If often unavailable, urgent matters can be neglected or mishandled. Opt for agents without constraints who can be wholly present if needed.

An agent who is constantly away on business trips or vacations may be unreachable during critical decision windows. And those unable to rearrange work schedules quickly to handle pressing legal or medical issues could put your best interests at risk through lack of responsiveness. Nearby does not always mean available.

Conclusion

Choosing the right agent to act on your behalf under power of attorney is one of the most crucial estate planning decisions you can make. The person selected will be entrusted with immense legal authority over your finances, health care and potentially other aspects of your life if you become incapacitated.

Key factors to assess include the agent's core competencies, trustworthiness, availability, communication abilities and geographic proximity. Examples are provided of problems that could arise if an agent lacks these attributes, like financial mismanagement, health care errors, family disputes or general unresponsiveness. Appointing an agent is an immense responsibility meriting careful reflection on how well aligned a candidate’s skills and traits are to the role. Taking time to find the ideal person to represent your best interests avoids future headaches and provides comfort that your affairs will be in good hands if the need arises.

How do I create an estate plan?

There are numerous options and scenarios to consider when developing an estate plan that protects your legacy and achieves your objectives, and important decisions should be made with the advice of qualified lawyers and financial experts. Membership with Legacy Assurance Plan provides members with valuable resources and guidance to develop comprehensive estate plans that take life's contingencies into consideration and leave a positive impact for generations to come. Legacy Assurance Plan members also receive peace of mind that a team of trusted, experienced professionals will assist them in developing legal, financial and tax strategies that will meet their needs today and for years to come through periodic reviews.

This article is published by Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at legacyassuranceplan.com.

Phone - 844.445.3422
Email - info@legacyassuranceplan.com
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