The concept of a power of attorney sounds simple but there is a lot to know about this important part of an estate plan, says the Rushville Republican in “Financial power of attorney responsibilities.” Whether you are named as someone’s power of attorney or you are considering who to name on your behalf, it is important to understand the terminology, the role and the responsibilities.
The person who signs the POA is called the “principal” and the person to whom authority is given, is often referred to as the “attorney in fact” or the “agent.”
What powers are given to the person who becomes the agent? The POA provides what powers the agent will have, but generally the idea is the agent can do whatever the individual would do. That includes opening bank accounts, buying and selling property, managing investments, filing taxes, cashing checks and closing accounts. An agent is a considered a fiduciary of the principal, which means that he has a legal duty to act in the principal’s best interest.
The POA generally is not recorded in a courthouse. If you are signing a document for the principal that does have to be recorded with the county, like a deed to a house, then you will need to present and record the POA with the county recorder, before the document can be recorded. The laws in your state or county may be different, so check with your estate planning attorney to be certain.
The POA should remember to keep his assets and the principal’s assets separate. Money should not be intermingled in bank accounts or investment accounts. This is a very important point, since the fiduciary responsibility is a serious matter. The POA can be changed or revoked by the principal at any time, as long as she is mentally competent.
The POA ends with the death of the principal. It is meant to be used as a helpful tool, while the person is living. After the person dies, the executor takes over as the personal representative of the person’s estate.
Speak with your estate planning attorney about making the decisions as to who should be your Power of Attorney. This is a very important role and it must be someone who you can trust implicitly and who is also willing to take on the responsibilities.
Reference: Rushville Republican (Jan. 22,2019) “Financial power of attorney responsibilities”