Typical Powers of an Agent in a Power of Attorney

Powers of Attorney are often created by individuals who are planning ahead for the possibility of future incapacity, by someone who is already elderly and/or ill, or when a person is going to be away for an extended period of time, such as military duty or overseas travel.  This legal document is signed and notarized while the person creating the document (legally known as the principal) still has the physical and mental capacity required to create such a document.

A power of attorney allows the principal to appoint someone else (called the agent or attorney-in-fact) with the ability to act on the principal’s behalf in the event of incapacitation or a prolonged absence. Generally, the agent is responsible for managing the finances and other assets of. The agent has a duty to follow the terms of the Power of Attorney document. The following is some specific information regarding the typical powers of an agent in a Power of Attorney document.

Financial Responsibilities and Legal Matters.

A principal may wish to give an agent responsibility over financial matters. These may include:

  • Banking: The agent can sign checks on behalf of the principal, or withdraw or deposit funds into the principal’s bank account. The agent can also sign and file a principal’s tax returns.
  • Bills and Property: An agent can pay a principal’s bills, maintain real property, and buy or sell real estate on behalf of the principal.
  • Assisting the Elderly or Infirm: In a Power of Attorney document, the agent usually has the ability to file for social security benefits on behalf of the principal and manage retirement benefits. The agent can also usually arrange and pay for caregivers who are needed to care for the principal. It is important to note, however, that this does not include the authority to make medical and other health-care decisions. Those powers are granted in a separate document called an Advance Health Care Directive.

And do not forget those digital assets!

We live in a time where digital assets increasingly play a role in our lives.  And under California law, an agent should have the power to control such assets.

An agent cannot change the agent’s will or use any of the agent’s assets for his or her own benefit, unless explicitly given the powered to do so by the principal in the Power of Attorney document. Keep in mind that signing a Power of Attorney document does not automatically give all of the power to the agent. As long as the principal is able to, he or she has the power to make decisions over their own finances and legal matters. In fact, often Powers of Attorney are not effective immediately upon signing, but only allow the agent to act on behalf of the principal when and if the principal is incapacitated in some way.

It should be noted that the agent must always act in the best interest of the principal in any and all financial and legal dealings. The agent must avoid acting on their own personal interest for the matters outlined in the Power of Attorney document unless specifically authorized by the principal, such as purchasing property from the principal or giving him or herself a gift of the principal’s assets. Because the agent does have access to the principal’s assets and has the authority to deal with them, it is essential for the principal to completely trust the agent put in charge of their affairs.

Whenever an agent is acting under the principal’s Power of Attorney document, the agent should always have a copy readily available. Any bank, investment broker, insurance company, etc. that the agent deals with on behalf of the principal will require a copy to verify that the agent does in fact have the authority to act on behalf of the principal and that the type of transaction the agent is trying to complete is included in the powers listed in the Power of Attorney document.

The examples outlined here are just some of the typical powers of an agent in a Power of Attorney document. To ensure the document is legally sufficient in California, the document must contain the date it is signed, be signed by the principal or in the principal’s name by another adult at the principal’s direction and in the principal’s presence, and be acknowledged by a notary public or signed by at least two witnesses.  It is advised that all Power of Attorney documents be prepared or reviewed by a California attorney practicing in the areas of estate planning, trust administration or probate, like the attorneys at Chilina Law Firm.

Authored by Karen Chilina and Co-Authored by Greg Chilina

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