For many individuals, the term “power of attorney” holds little significance.

Even those well-versed in the subject may occasionally forget the specific roles and responsibilities involved. Whether you are new to the concept or in need of a refresher, this primer will elucidate the duties and obligations of an agent under a power of attorney.

To begin, it is essential to comprehend the expectations placed upon an agent under a power of attorney. An individual appointed to this role becomes a representative of the principal’s financial affairs. Essentially, they are granted the authority to act on behalf of the principal.

For agents appointed under a limited power of attorney, their authority is narrowly defined. Typically, their capacity to act on behalf of the principal is restricted to the specific transactions or actions delineated in the limited power of attorney, such as executing a real estate deed on behalf of an out-of-town principal. This type of power of attorney imposes stringent parameters on the agent’s actions.

Conversely, an agent under a general power of attorney possesses the authority to conduct all financial transactions on behalf of the principal, subject to any restrictions enumerated in the document or imposed by state law.

Regardless of the type of power of attorney, agents are required to act as fiduciaries to the principal. This entails operating in good faith and with the principal’s best interests in mind. When making decisions, the agent must consider what the principal would choose. Agents who abuse their authority can be held liable for their actions.

Under a durable power of attorney, the agent’s responsibilities commence as soon as the principal signs the document. However, most principals do not anticipate the agent utilizing this authority unless they become incapacitated. For those appointed under a springing power of attorney, the agent’s authority is contingent upon the principal’s incapacitation. Principals should discuss their expectations with the agent to ensure clarity on how to best fulfill the principal’s wishes.

Should an agent need to act on behalf of the principal, it is imperative that they meticulously document all actions taken. Proper documentation serves as the best defense against any questions or challenges to the agent’s actions. Agents must also maintain a clear separation between their finances and those of the principal.

Davis Law Group Can Help

If you are uncertain about your duties as an agent under a power of attorney, it is advisable to communicate openly with the person who appointed you. Seek clarification on your responsibilities and their expectations. Additionally, consulting with an estate planning attorney can provide a comprehensive understanding of your rights and options. By equipping yourself with knowledge about your duties, you will be better positioned to achieve the principal’s goals and wishes. Contact Davis Law Group today for you and your loved ones’ peace of mind.