Have you been given Power of Attorney over someone? Then, you have the key to the door- make sure you keep that house in order!
Here are a few quick tips on fulfilling your duties as someone’s “agent”. Let’s say Minnie has given you power of attorney (legal authority) to manage her property and finances. What should you do?
First, you must see when you can start serving. Powers of Attorney range in the authority they give- the document could allow you to start serving right away or only when Minnie can no longer make decisions for herself. Next, you should read and make sure to fully understand the Power of Attorney so that you are doing exactly what it says!
Whenever you start serving, be very responsible in managing Minnie’s property and finances. You want to handle Minnie’s affairs more carefully than you handle your own! Why? Because you are a Fiduciary. You have been given LEGAL authority to manage these affairs. Being negligent, reckless or fraudulent in your actions while serving as Minnie’s fiduciary can lead to trouble for you- even if you are related to her!
As a practical matter, it always helps to start out by making a list of assets and debts so that you will be aware of what you must maintain/ manage. No matter how small (Minnie may have a rented apartment and two checking accounts) or how large (she may have various properties, investments, accounts, etc.), you must make sure you are aware of what you will be responsible for managing.
You must keep Minnie’s money separate from yours and maintain excellent records and receipts for all transactions. It may even be beneficial for you to obtain software, i.e. Quicken or Quickbooks to keep track of transactions.
Most important in this process, in EVERYTHING you do, you must make sure to act in Minnie’s best interests. This concept should govern every action you take. You are appointed to serve to Minnie’s benefit, not a family member of hers or even your own.
Here are some things you should generally avoid:
-Opening new joint bank accounts -Making loans to yourself -Paying yourself for the time you spend handling her affairs unless her Power of Attorney/ State Law specifically allows for it -Much more!!!
Don’t do what’s right? You will pay the cost. You can be removed as agent, sued or even face criminal consequences.
There are so many other factors in play when serving as someone’s agent under a Power of Attorney. You want to make sure you are using good judgment, acting within your authority and at all times in the best interests of the person you are serving for. This is not to be taken lightly! Contact C&G to assist you today!
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