Preparing for the vast array of circumstances that the future could hold can be a daunting task, and most of us recognize the need to name someone to handle our affairs and decisions if we become ill or incapacitated.
However, many older Americans are increasingly concerned about the potential dangers of granting such power to another individual, and rightfully so.
What is a Financial Power of Attorney?
A financial power of attorney is a legal document that allows you to name one or more persons (your agent(s)) to help you handle your financial affairs in the event you are incapacitated either temporarily or permanently. Even with this document in place, you remain in complete control of your finances as long as you are able to make decisions on your own behalf.
The Georgia legislature enacted a new power of attorney statute in July 2017. It is important that you consult with an attorney to be sure that any power of attorney you sign after that date complies with the new statute and gives you the security, protection, and convenience you need.
Depending on what is appropriate for your circumstances, you have the choice to grant complete or limited power to your agent to act on your behalf. An example of complete control would be granting the power to sell property, access bank accounts, and make decisions about your investments based on your agent’s understanding of your best interests. An example of limited control would be authorizing your agent to pay your monthly bills from a specific account and nothing else.
You can revoke a financial power of attorney at any time by writing and signing a revocation of power of attorney document and presenting it to the agent and all institutions that have been dealing with your agent (your bank, your mortgage company, etc.).
How Do I Choose a Reliable Agent Under My Financial Power of Attorney?
Your financial power of attorney agent has a fiduciary responsibility to act on your behalf, meaning your agent is legally required to make decisions that are in your best interest and not the agent’s own interest. However, there is no doubt that naming an agent gives that person a great deal of power over your finances and your future. Therefore, it’s essential to choose an individual who is reliable and trustworthy.
You should never feel pressured into naming an agent or signing a power of attorney document – or any legal, financial, or medical document, for that matter. Listen to your instincts. If it feels as though someone is attempting to coerce or manipulate you to sign a document, take a break and discuss the situation with someone else, preferably a professional financial advisor or attorney.
You can build some protections into your financial power of attorney. For instance, you could require your agent to account regularly to family members, your accountant, or your attorney for any actions taken under the power of attorney. Or, you could forbid your agent from gifting in your name, to the agent or to others.
Also, be aware of problems that could arise if you name two agents to act jointly. For instance, you might want to name your two adult children as agents, but what if they disagree about what should be done? Discuss alternatives with the attorney who is drafting your power of attorney to be sure that you end up with a document that is tailored to your needs.
Finally, consider naming as your agent a professional advisor, as opposed to a family member, if that is right for your circumstances.
What Do I Do If My Accounts Have Been Compromised?
If you believe that your power of attorney agent has acted in a way that is not in your best interest, it is important to get proper legal guidance immediately. At Gaslowitz Frankel, we represent clients in all sorts of fiduciary litigation, including disputes over actions taken with a power of attorney, and we are sensitive to the considerations involved if the agent is a family member. For trusted guidance in dealing with this important issue, consult with the expert attorneys at Gaslowitz Frankel by calling 404-892-9797.