5 Things to Know About Serving as Power of Attorney

A person who signs a Power of Attorney is called the principal.  The person you have named to help you is called your agent.  Your agent has a responsibility to make good decisions for you.

There are two different types of powers of attorney forms:

  • A health care power of attorney

A health care power of attorney allows the agent to make health care decisions ONLY when the principal is not capable of making his or her own decisions.

  • A general power of attorney.

A general power of attorney grants an agent the authority to take other types of actions such as managing finances, picking up the mail, signing authorizations for your pet to receive medical care, and a host of other activities we just take for granted.  A general power of attorney can grant the agent authority as soon as the document is signed, or it can be a standby document that only becomes effective after the principal has become disabled.

Whether it is a healthcare power of attorney or a general power of attorney, the principal can revoke (cancel) the grant of authority anytime the principal wants to, even if the principal is no longer mentally competent.

What to do if you have been named as an agent under a power of attorney:

  1. Read the Power of Attorney form. It will say what type of power of attorney it is.  It will also tell you what authority you have been granted.
  2. Keep a written log of anything you do under authority of the power of attorney. Record the date, the activity, and why you did it.  That way, if anyone ever challenges your actions, you have a clear record.  (See our Agent’s Record Keeping Book).
  3. Do not sign anything as yourself. Always make it clear you are signing as an agent for someone else.  Sign your name, “as agent for [name of the principal].”  If you do not sign this way, you could be held personally responsible for whatever it was you signed.

Example:  Melissa Sample signing for her mother, Edith Sample.

Melissa Sample, as agent for Edith Sample

  1. Do not pay for things out of your own account and then reimburse yourself from the principal’s account. It can look like you are taking gifts for yourself.
  2. Do not use your position to unfairly benefit yourself. There are laws that prohibit you from doing that.  So, for example, if you are mom’s agent and mom needs to sell her car, don’t buy it on the cheap.  You have to pay her full price.  Failure to do that can open a huge can of worms.

How to Grant or Obtain a Power of Attorney

Although a person can revoke a power of attorney at any time, a person must be competent to grant a power of attorney.  This is sometimes a problem if the principal is starting to have memory or mental health issues.  You should seek assistance from an Elder Law attorney. The attorney will make an assessment, after meeting with the principal, in private, as to whether or not the principal has the legal capacity to grant the powers.  The agent should not sit in on this meeting.  This protects the agent from challenges by others (siblings, etc.) that the agent exerted some form of pressure on the principal.

Problems frequently encountered by an agent during the Medicaid application process include the inability to: cash in and/or change beneficiary on a life insurance policy, change the beneficiary designation on an annuity, cash in stocks or bonds, and terminate a revocable trust. The “bar form” (fill in the blank form provided by the Iowa Bar Association) is not adequate in addressing the needs for those who act as agents for seniors.  In order to be proactive, many Elder Law attorneys prepare custom-made power of attorney forms.  Likewise, it is not a good idea to try to find a form online and do it yourself.

If the Elder Law attorney determines that the principal DOES NOT have the legal capacity to grant a power of attorney, then the next step would be to obtain a guardianship and conservatorship.  This is a process that involves the court system.

DISCLAIMER: This publication is intended for educational purposes only.  It is not intended to create an attorney/client relationship and does not constitute any sort of contract.  Every situation is different.  The determination of legal rights and responsibilities is complicated and highly dependent on the specific facts of the situation.  If you are in need of legal assistance, you should consult an attorney with experience in that area of law.

© Letsch Law Firm, P.C.   2018    |  Letsch Law Firm, P.C., 112 NE Ewing St., Suite D, Grimes, IA 50111

Mission – Devoted to providing legal guidance with compassion and understanding

Areas of Practice– Elder Law, Medicaid Benefits, Wills, Trusts, Guardianships, Conservatorships Powers of Attorney, Probate, Trust Administration, and Veterans Aid and Attendance Benefits

2018-10-26T15:21:55+00:00