Your agent is the person you choose in advance to act on your behalf on financial and legal matters in the event you become unable to do so for yourself. Typically this includes paying bills, making investment decisions, conducting real estate transactions, filing taxes, and other relevant matters. Managing your finances for you may take a considerable amount of time. If your agent incurs expenses while acting on your behalf, they are always entitled to be reimbursed for those expenses. In addition, you can choose to allow your agent to be compensated for the time they spend acting as your Power of Attorney agent.
The powers granted to the agent may be broad or limited.
Since this person will have the legal authority to act on your behalf, it's vital that this person is trustworthy and will act in your best interests. When considering whom to name as your agent in your financial power of attorney, there are several questions to address:
- Do you trust this person with your important financial and other legal affairs?
- Is this person financially responsible? How do they manage their own financial and legal affairs?
- Will the potential agent charge you a fee? Family members usually perform the service gratis, but a fee is usually involved if you pick a lawyer or accountant. If you want your Power of Attorney agent to be compensated for their time, your POA document will need to state that they can receive compensation. In some states, if the document doesn't explicitly state they can receive payment for serving as your agent, then they cannot be compensated.
- Will this person agree to serve as your Power of Attorney agent? You should discuss your decision with them, and they should agree before you officially appoint them.
Remember, if you ever become unsure of your agent's trustworthiness or if a conflict of interest arises, you should terminate your financial power of attorney and create a new one.
Note: Your agent acting under a power of attorney has no control over decisions involving assets owned by your trust. The trustee of your trust manages assets owned by the trust. Your agent does not have testamentary powers either. They cannot sign new documents into being on your behalf, nor make changes to your qualified accounts.