Adding the right combination of power of attorney documents to your estate plan can help cover all the necessary bases where a will might not suffice. Being appointed as an agent or “attorney-in-fact” under a power of attorney is an important responsibility that comes with legal and ethical obligations. Whether you are acting as an agent for a family member, friend, or client, understanding your role and diligently fulfilling your duties is crucial. To avoid liability and potential civil disputes, there are several important practices to maintain.
Understand the Appropriate Documents
Before you accept your role as an agent, you need to review the document thoroughly. It outlines the scope of your authority, responsibilities, limitations, and the duration. Pay close attention to the specifics of the instructions provided by the principal (the person granting the power of attorney) and make sure that you both understand them and are willing to follow through.
Know Your Responsibilities
The primary responsibility as an agent is to act in the best interests of the principal. This means that all decision making and matters under your control need to prioritize the principal’s well-being. This can get complicated if you’re not entirely clear on the types of transactions and decisions you’re authorized to make.
Act with Fiduciary Duty
Understand that your role as an agent involves fiduciary duty, which means you must act in the principal’s best interests regarding their property or finances at all times. Avoid conflicts of interest and refrain from using the authority for personal gain. For example, you may think it’s in the best interest of the principal to use the funds available to you to pay off all their debt, but if that’s not the purpose of your duties as an agent, it’s not the best course of action. If anything seems unclear, seek legal advice or clarification from the principal.
Maintain Impeccable Records
You may not need to act as an agent for very long, but during that time, you must maintain accurate records of all transactions, decisions, and communications related to your duties. Documenting your actions will help in case of any future disputes and will be helpful to the principal in the event that they no longer need power of attorney. Being transparent fosters trust and ensures the principal’s wishes are respected.
Abide by the Time Frame
Many power of attorney documents set a specific time period of contingency to follow. As an agent, you must continue your duties throughout the period specified in the document or until the principal revokes your authority. To avoid conflict, you need to stop all acting as soon as your duties are fulfilled.
Seek Professional Advice
Being named as an agent is a great honor and signifies that the principal trusts your judgment. However, this doesn’t mean that you’re expected to know how to do everything immediately after you become the agent. If you encounter complex legal, financial, or medical matters beyond your expertise, don’t hesitate to seek guidance from professionals, such as attorneys, accountants, or healthcare professionals.
By adhering to these essential pieces of advice, you can fulfill your role as an agent for a power of attorney effectively and responsibly. As a trustworthy individual, acting thoughtfully and following all applicable laws and regulations will protect the interests of the principal and yourself. If in doubt, the attorneys at Albright & Lumpkin, PC, are happy to provide professional legal guidance to help you interpret the documents and act within the bounds of your authority. If you believe adding power of attorney documents to your estate plan will provide you with the security you need, call us at (713) 455-6661 today.
Albright & Lumpkin, PC
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