What Is a Power of Attorney Agent?
You will never regret having made provisions for the future. In the event that you become incapacitated for any reason, it is important to have someone who can manage your affairs. One of the most popular ways to do this is to appoint a power of attorney to handle your financial affairs. But not everyone has this option - you may be elderly yourself or there may be no family members you trust with this power of attorney. What should you do to make sure your finances are in safe hands?
Below, you'll learn who you can - and should - name as an agent in a power of attorney to ensure your assets are safe even if you're no longer able to manage them.
What is a financial power of attorney?
There are different types of powers of attorney. A financial power of attorney allows another person to manage your finances while you are alive but unable to manage them yourself. According to Market Watch, experts usually recommend a durable power of attorney, which takes effect immediately after you sign the documents and is valid until your death.
Having a power of attorney does not mean you have relinquished control of your assets; having an agent only means your agent can also act for you when necessary. The power of attorney expires when you die, and control of your finances usually passes to the executor you named in your will (who may or may not be the same person).
How do you choose your power of attorney?
Given the power and responsibility this person will have with regard to your finances, you should appoint someone you trust to look out for your best interests. In addition to trust, it doesn't hurt to choose someone who is knowledgeable about your finances and the responsibilities that come with them. However, according to the American Bar Association, the most important quality in a potential representative is not their business acumen, but their integrity.
But what if there is no one in your life who qualifies? Generally, people do appoint family members, but you can choose anyone over the age of 18 as an agent.
Look around for others in your area who are willing and qualified to take on this task. This could be a friend, an accountant, or perhaps a clergy member. You can even assign this task to more than one person to share the responsibility (just make sure the power of attorney allows each proxy to act independently).
If you don't have anyone in your life you want to give power of attorney to, you can also turn to a court-appointed guardian in case you become incapacitated.
How much does a power of attorney cost?
One of the biggest advantages of having family members take on this task is that they will likely not require financial compensation. If you hire a professional attorney to create a durable power of attorney, the legal fees can add up quickly - and you don't know how long you may be incapacitated.
Before you agree on a flat or hourly rate, do your research. The average hourly rate for a family law or probate attorney is about $300 per hour (according to ContractsCounsel's marketplace data). Depending on how many hours he charges as an attorney-in-fact, these costs can dangerously drain your resources. Seek outside legal advice and perhaps ask for a breakdown of the hours your potential attorney spends managing the affairs of his or her incapacitated clients.
Policygenius points out that if you choose to create a power of attorney yourself, you will generally only be responsible for the cost of notarization. However, AgingCare recommends investing in an attorney to be present when you create a power of attorney document, as online versions do not include professional advice, legal witnesses, customization and quality insurance.
The bottom line.
Appointing a proxy in your life is an important step in any advance care plan. You may not have an obvious choice of who should take on this role, but you can consider people other than your immediate family members. Make a list of all eligible people in your area, and don't exclude friends just because they are the same age or in the same boat as you.
Was this article helpful?1 Posted by: 👨 Brian C. Clark