You Have Been Named the Agent in a Financial Power of Attorney. What Next?

You Have Been Named the Agent in a Financial Power of Attorney. What Next?

Our friends and family will make a lot of big requests of us in our lifetimes. Maid of Honor. Best Man. Godparent. Another, slightly less exciting, responsibility is when you are named as the agent in a Financial Power of Attorney. This is a huge responsibility, but it doesn’t have to be as intimidating as it sounds. Hopefully, you have a long time before you need to use this information. But if you have accepted being the agent in a financial power of attorney, it is your responsibility to be as prepared as possible.

What is a Financial Power of Attorney Document?

A Financial Power of Attorney is a legal document that grants the Agent or Attorney-in-Fact the authority to financially act on behalf of the Principal. Ordinarily, a financial power of attorney enables the Agent power over the Principal’s financial responsibilities, including:

  • Bills
  • Account Access
  • Taxes
  • Investments
  • Real Estate

Steps to take After Being Named Agent in a Financial Power of Attorney

Financial Power of Attorney puts the Agent in a position of power over the Principal’s financial matters, but it does not have to be an overwhelming task. Set yourself up for success by considering the following steps.

  1. Do Your Research: You don’t need to write a dissertation on the subject, but absolutely make sure that you have reviewed all of the documents you have agreed to handle on behalf of the Principal. Thoroughly review your power of attorney document and write down any questions you have to ask a Succession attorney. Fortunately, most powers of attorney include information about the duties the Agent owes to the Principal.
    1. Spending Patterns: Research also includes studying your Principal and their spending habits. Once you get a sense of their reoccurring expenses, you can have a better idea of how to plan your responsibilities.
  2. Make a List: Make a list and check it twice. Or three times! Your list should include all of the assets and liabilities you are now in charge of, including:
    1. Phone, Cable, Internet Bills
    2. Tax and Insurance Bills
    3. Utility Bills
    4. 401 (k)s, IRAs, 403(b)s
    5. Bank Accounts
    6. Brokerage Accounts
  3. Protect Your Principal’s Home and Property: Part of your responsibilities as an agent is to ensure the Principal’s assets are secure and safe. If your Principal is incapacitated, you can begin to look after their home by checking for problem areas or possible leaks that could lead to weather-related damage. Video footage is the most effective way to capture the home’s original condition.
    1. Recurring Bills: If the Principal is incapacitated and is going to be for the foreseeable future, consider canceling their unnecessary recurring payments, such as magazine subscriptions or streaming services.
    2. Security: When operating with unknowns, the safest bet is to take every precaution to protect the property of the Principal. It never hurts to change the locks of the property to avoid the worst-case scenario if the residence is identified as unoccupied by potential trespassers.
    3. Communication: Don’t be afraid to talk to family or neighbors to be on the lookout for anything suspicious. Communication also applies to the Principal’s family. To avoid any misunderstandings, make it clear that you are supervising their property, so family and friends should inform you if they have something they need to retrieve from the home.
  4. Take No Risks: Don’t take risks with the Principal’s money. If they have made investments that you do not understand, you will regret trying to navigate high-risk positions and investments. Consider seeking counsel on investments that you do not have the expertise to handle.
  5. Paying Bills and Taxes: If the Principal is incapacitated, the Agent is responsible for paying necessary bills and taxes during their lifetime. However, if the Principal passes away then it is the executor’s responsibility to finish final bills and taxes.
  6. Keep Diligent Records: Finally, make sure your record-keeping is impeccable! This is for your benefit and the Principal’s. These records will help you remember what you still need to achieve and will help you demonstrate that you have continued to act in the best interest of the Principal.

Contact Edward J. McCloskey Today!

An experienced Succession attorney will be able to help you set up and navigate the durable power of attorney for financial matters. If you are considering naming a financial power of attorney, or have questions about accepting this role, contact the Edward J. McCloskey Law Firm! Edward McCloskey has over 45 years of experience practicing Business and Succession Law. Contact McCloskey today for a consultation!