If you are chosen to the power of attorney for a family member or friend, you will likely have a lot of questions. One of the most common questions estate planning lawyers answer involves the responsibilities of a person chosen as power of
attorney. This is not uncommon as many people are only chosen once to serve as power of attorney. Some people who are named in this legal document wind up not having to handle anything for the person who made the decision. Let us take a look at the responsibilities you have when named as power of attorney.
The most important duty you have is to the person who named you power of attorney, otherwise known as the principal. This means that you must legally follow all the instructions laid out by the principal in the will and other estate planning documents when the time comes. The time could very well come before they pass away, but have become incapacitated due to an injury or illness and cannot make decisions on their own. If not, the time will come once the principal dies.
Keep Assets Separate
Every single asset that the principal has must be kept separate from your own assets. You can not mix anything, including money, property, retirement accounts or any other asset. As the agent you are allowed to add your name to the various accounts of the principal, but make sure they are still the primary holder of the account, especially when it comes to filing tax returns for any interest-bearing accounts.
Cannot Use Assets
The agent of a power of attorney document is not allowed to use the assets of the principal for their own benefit. The only way this is allowed is if the principal stipulates in writing that the agent can use the assets. For example, the principal
might state that the agent can reimburse themselves for any transportation costs or other expenses paid out of their own pocket while caring for or representing the principal.
Treat Descendants the Same
All the descendants of the principal must be treated the same. You cannot favor one over another simply because you like one more than the other. If you have been arguing with one of the principal’s descendants, you cannot take it upon yourself to withhold their inheritance or give more inheritance to another descendant of your choosing.
Keep Accurate Records
The agent named in a power of attorney document is responsible for keeping accurate records at all times. This includes deposit slips, account statements, receipts, tax returns and more. All of these documents should be kept in a safe place in the event that a petition is filed with the probate court for an account of the principal’s assets.
Contact an Estate Planning Attorney
Do you have questions about being named a power of attorney for a friend of loved one? Not sure what you will be responsible for when the unthinkable happens? Contact an experienced estate planning attorney at Moen Sheehan Meyer Ltd. today to schedule a consultation.