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What happens if you’re granted power of attorney

On Behalf of | Aug 10, 2023 | Estate Planning

Powers of attorney are among the most useful of the many estate planning tools that help people protect their interests from the uncertainties of an unpredictable future. An individual concerned about the possibility of future incapacitation can name a specific person whom they know and trust to serve as their agent or attorney-in-fact and designate them as such on their power of attorney paperwork.

In the event of a testator’s incapacitation, the individual who they selected will be able to act on their behalf to manage financial matters and/or medical concerns. Someone named as another party’s agent in power of attorney documents will have certain obligations to fulfill and also certain limitations on their authority that they’ll need to understand about before assuming their role.

Agents must act in the best interests of the incapacitated party

Someone selected to serve as attorney-in-fact for an incapacitated individual should not use their position for personal gain but should instead seek to support the vulnerable individual that trusted them. Whether they must handle short-term financial matters for someone in a coma after a car crash or manage all personal household matters for an older adult with diminished capacity, their priority should be the safety of the testator.

They will also need to abide by the specific instructions provided in the paperwork, whether the documents require that they wait for the incapacitation to persist for a specific amount of time or that they only handle specific matters on behalf of the incapacitated party. Sometimes, power of attorney will only grant the authority to access certain resources or handle specific responsibilities. Other times, they will grant broad-reaching authority to the attorney-in-fact.

Those serving as attorney-in-fact will generally want to keep careful records of the actions they take using their authority, including receipts for all financial transactions conducted using the testator’s resources. Those records can help someone validate to others that they have appropriately fulfilled their role.

Those who act in ways contrary to the instructions provided or take steps obviously intended solely for their personal benefit could face removal from their position and other consequences. Family members may question the choices made by an attorney-in-fact out of concern for the incapacitated person and/or the preservation of their resources.

Understanding the obligations that come with assuming power of attorney can help those who have agreed to support a loved one do so more effectively and with less personal risk. This understanding can also be helpful for testators contemplating who they should grant this authority to and concerned loved ones who may have cause to question an agent’s authority as well.

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