Setting up a power of attorney involves appointing someone as your agent or attorney-in-fact. It is a role authorized to make financial or property-related decisions on your behalf under specific circumstances.
Ideally, you already have a person in mind who can responsibly fill the role and carry out tasks properly. Sometimes, choosing someone for this position is challenging, especially if you are unaware of how they should act. Ultimately, this person should always conduct transactions and fulfill their duties in the best interest of the principal, including the following best practices:
- Read the power of attorney thoroughly and act within its limitations. A responsible attorney-in-fact knows how to practice restraint to avoid overstepping boundaries set by the document and state law. Additionally, they should only carry out duties when the document becomes effective.
- Keep the principal involved whenever possible. An attorney-in-fact can only perform duties because of the authority provided by the principal. If they can express their opinions or preferences despite their incapacity, it is best to follow them if it won’t cause any harm.
- Maintain integrity as a fiduciary. The principal places significant trust in their attorney-in-fact to manage their property and finances appropriately. A responsible attorney-in-fact would prevent conflicts of interest at all costs and only perform transactions allowed by the power of attorney.
If you choose a person for this position, name someone who can take on these responsibilities properly.
What qualities should I look for in an attorney-in-fact?
In any situation, a fiduciary should always conduct dealings in good faith and be transparent. Being responsible for someone else’s property and assets is a significant undertaking. One of the ways to ensure your power of attorney works as intended is by choosing the right person fit for the role.