So You've Been Chosen as an Agent on a Financial Power of Attorney

An honor and responsibility

As agent, you will have the right and responsibility to make financial decisions for the principal if he or she ever loses the ability to make those decisions. You should feel honored that someone trusts you enough to task you with this, but it is an enormous responsibility. If you don't feel up to the responsibility, you can refuse it, and it's only fair that you know what you're undertaking.

The first thing you need to do, of course, is read the power of attorney. It will describe the full extent of your powers and responsibilities, and it will say whether it takes effect as soon as you sign it or as soon as certain conditions, such as the incapacity of the principal, have been met. If you have any questions - and you almost certainly will - you should ask an attorney for help. An elder law attorney would be best, as they are most familiar with powers of attorney.

Your responsibilities as Agent

Your main responsibility is to understand and, as much as possible, to internalize the wishes and preferences of your principal, so that you can truly speak for him or her. As agent, acting in good faith is necessary but not sufficient - you must do everything in your power to avoid even the appearance of a conflict of interest between yourself and your principal. The agent should learn the principal's estate plan and preserve it. Keep an absolute firewall between the principal's money, property and other resources and the agents. Above all, write down everything. Document every decision and make sure every cent of every expense has been fully documented.

One more thing the agent and the principal should do is make sure that the financial power of attorney is drawn up properly, so that the agent can use it to protect the assets of the principal when he or she may have to enter into a nursing home. This needs to be done as soon as possible, while the principal is still of sound mind. Certain language must be included in the power of attorney document to allow gifting to take place. Under the new Financial Power of Attorney Statute enacted in North Carolina in 2018, the language required in the Power of Attorney to allow broad gifting is much more difficult to include. Not every attorney who draws Powers of Attorney is aware of this additional language that will be needed. You need to consult with an elder law attorney about this. Because of the new North Carolina Statute regarding powers of attorney for financial purposes, you should make certain that the attorney drawing your document is able to include broad gifting powers for your agent if you want that agent to have the ability, in a crisis situation, to transfer assets out of your name in order to qualify you for Medicaid and to protect these assets for your family.