There are several protections your lawyer can include when drafting your power of attorney. These protections can limit your agent’s authority and hold that agent accountable.
- First, be sure to select the right person to serve as “agent” under power of attorney. Name the person in your life who you know is capable and completely trustworthy. The agent does not need to know everything themselves but should know when to ask a professional for advice. Do not name your eldest child to serve just because he or she is the eldest. Name the person you think will do the best job.
- You can require joint action (“two signatures”) before certain authority is exercised. For example, you may want co-agents so that two signatures are required for certain actions. Some banks to not open bank accounts for co-agents, so you may also want to include the power of co-agents to delegate certain tasks to one of the other, such as basic bill paying. They could agree between the two of them that one signature could be required on a checking account, for example, but both would receive monthly statements or have online access to monitor ongoing account ac
tivity. - Consider requiring your agent to give copies of your financial statements to certain people, such as their siblings, uponrequest. For example, if you are naming one of two children to serve as power of attorney, maybe it would be appropriate for the other child to always have access to the financial records just to make sure all is being handled properly. You can require your agent to provide copies of financial records to people you name upon request. This provides a check on your agent’s power, and can keep your other children informed about how your funds are being used in the event of your incapacity.
- Give someone the power to require your POA to file an accounting with the court. Not just anyone can require the person you name as agent to file an accounting with the court for review. The person must have “legal standing”, that is, the legal right to do so. Your lawyer can draft this power into your POA document. For example, if you have two children and name one to serve as POA, you can give the other child permission to file an accounting with the court, if needed. This power would be helpful if the non-POA child felt that the one you named as POA was not meeting their legal duties or acting in your best interest.
- Worst case, consider not signing a power of attorney. Without a power of attorney in place, the costs of guardianship can be expensive. However, signing a POA that names the wrong person can be much more expensive than any expense related to guardianship, especially if the POA takes or mishandles your money. Guardianships are court supervised, and the person appointed as guardian needs to file an annual report setting forth your finances. A guardian needs to get court permission to spend your money, aside from income. In most cases it makes sense to sign a POA if do have someone to act on your behalf, but if you do not have someone it can be better to not sign a POA rather than sign a POA that names the wrong person.
If you wish to have our office help you with your estate planning documents, including preparation of your will, financial POA, healthcare POA, and possibly a trust if appropriate for your situation, please call or contact us through this website.
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