Whether we realize it or not, any of us can lose, temporarily or permanently, our capacity to perform critical tasks which enable us to live independently. A friend of mine recently asked for information about serving as a Power of Attorney for his father who moved into hospice and his mother who is overwhelmed at the thought of losing her spouse of over forty years. For his father, this situation would be permanent – until he passes away. For his mother, he hopes that the situation would be temporary – just until she feels strong enough to assume the role of household manager again. As Power of Attorney, my friend would be his father and mother’s agent.
If you have been asked to serve as Power of Attorney for a family member, remember that this role carries legal responsibilities. When you act as someone’s Power of Attorney, you must always:
- Act in that person’s best interest.
- Avoid potential conflicts of interest.
- Keep a list of the person’s money, property, and debts.
- Manage their money and/or property with great care.
- Inform banks and other institutions that you are serving as Power of Attorney so that when you contact them, they will talk to you.
- Keep their money and property completely separate from yours.
- Always pay their expenses from their funds not yours. You do not want to get in the sticky situation of having to be paid back for things.
- Always sign as the agent: “Tracey A. Miles, as agent for Jane Doe” or “Tracey A. Miles, POA for Jane Doe”.
- Keep excellent records which include notes on situations that may require you to remember details at a later date.
- Keep receipts and notes – even for small expenses.
- Avoid paying in cash because this eliminates traceable records.
- Do not borrow from anyone for whom you are an agent.
- Be aware of scams – even though you are the agent for a person, it does not mean that family, friends, neighbors, business people, or others will not try to take advantage of the situation.
- Remember that your Power of Attorney can be revoked at any time. If it has been revoked, you need to let banks and institutions that you no longer have the authority to act as an agent.
- Power of Attorney ends when a person dies.
Also, you may set up someone to be your Power of Attorney at any time. That does not mean that they immediately need to begin acting as your agent. In this particular case, my friend can serve as the Power of Attorney for a year until his mother is capable of acting on her own behalf. She may then take over her own finances until she gets older and may require her son to step in for her again. During that time, he is still her Power of Attorney and can provide help. However, he does not need to actively manage her money or property during the time when she is capable of managing on her own.
These are some quick tips for family and friends serving as agents. This is not meant to provide legal advice but rather a high level list of quick tips to follow. Since state laws vary, consult a lawyer for specific legal advice.