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 durable power of attorney.
A general durable 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 durable 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 durable 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.
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.
- 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. And/or, if someone needs to take over for you, there is a record of what has been done and why.
- 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
- Make decisions consistent with what the agent would want, rather than what you would want for the agent. For example, if you want your mother’s kitchen painted blue, but you know she would have preferred it yellow, have it painted yellow. The principal’s best interests and wishes are primary.
- Deposit any money you receive on behalf of the principal directly into the principal’s bank account.
- Provide a copy of the Health Care Power of Attorney form to the doctor and hospital. Keep in mind that you cannot use itUNTIL you have a letter from a doctor stating that the principal can no-longer make decisions for her/himself. This is called “activating” the Power of Attorney. Staple the letter to the Power of Attorney Document.
- Read the General Durable Power of Attorney form and consider visiting with an attorney to learn when the form becomes activated and what your limitations are under the document. A general durable power of attorney does not automatically give you the authority to do anything you want.
- If you no longer want to (or cannot) serve as an agent, let the principal know right away; and if the principal is no longer able to manage his/her own affairs, let the alternate agent (listed on the form) know. Sign a letter stating that you are resigning as the agent. Give it to the principal and/or the alternate agent.
- Provide an annual accounting of your activities to anyone who is entitled to review them. The Power of Attorney document should tell you if anyone has the right to see them.
Add your name to the principal’s bank account as an owner. If you are added, make certain that it is as a “signer” only.
- Mix any of the principal’s money with your own or vice versa.
- 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.
- Pay yourself for serving as an agent, unless the Power of Attorney form allows you to be paid. If you are paying yourself for agent duties, prepare an itemized invoice for your time and services and submit it to the agent, before paying yourself any money.
- Give yourself any gifts of the principal’s things or money, unless the document specifically allows you to do it. Most Power of Attorney forms state the circumstances under which the agent can give him/herself gifts and/or name a third party who has to approve the gifts, unless you are the principal’s spouse.
- Give gifts of things or money to anyone else, unless the Power of Attorney document specifically allows you to do this, AND if the principal is older, understand that giving gifts of expensive personal property, real estate, and/or money can cause a huge problem in obtaining Medicaid to help pay for nursing home or assisted living care. If the principal is over 75 years old or in poor health, then the better advice it to refrain from making any gifts.
- Change beneficiary designation forms on life insurance or other assets to name yourself as a beneficiary, unless you are part of a class that is being names and you are not taking more than your share.For example, if you are changing life insurance beneficiaries on your mother’s policy from your father to the children, you should not take any greater share than your siblings.
- Use your position to unfairly benefit yourself or your children (exceptions apply if you are the principal’s spouse). 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 must pay her full price. Failure to do that can open a huge can of worms.
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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