Contact  724-863-6770   

Bankruptcy Attorney ● Child Custody ● Personal Injury
Greensburg ● Irwin ● Jeannette

Memorandum to Agent Acting Under a Power of Attorny

By Maureen Kroll, RN, MN, JD

 After you review this information, don't forget to contact us for a consultation.

What Is A Power of Attorney?

You use a Power of Attorney to let another person or persons (your "agent( s )") stand in your shoes and act for you in financial, personal and business matters. That person can do whatever you may do - withdraw funds from bank accounts, trade stock, pay bills, cash checks - except as limited in the Power of Attorney. This does not mean that the agent can just take your money and run. The agent must use your finances to carry out your goals, as you would for your benefit and as you authorize.

The choice of powers you want to give your agent is up to you. Once your agent accepts his role as agent, he owes a special duty of care to look out for your best interest. This duty of care continues until the Power of Attorney is revoked or until the agent resigns.

Your agent should review the Power of Attorney document thoroughly and familiarize himself with any restrictions or limitations contained in the document. If there is any question or confusion whatsoever, consult legal counsel.

Why Is There A "Notice" To Be Signed at The Beginning of The Power of Attorney?

A Power of Attorney takes effect as soon as it is signed by you (the "principal") and your agent and is delivered to your agent. If you want the Power of Attorney to take effect only when a certain event described in the Power of Attorney itself takes place, we will use a "springing" Power of Attorney. A springing Power of Attorney is used when you want your agent to use the Power of Attorney only after your agent believes you are incapacitated and/or you are certified by your treating doctor as being incapacitated. Incapacity occurs when you are no longer able to manage your personal and/or financial affairs.

Why Is There A "Notice" To Be Signed at The Beginning of The Power of Attorney?

A Power of Attorney takes effect as soon as it is signed by you (the "principal") and your agent and is delivered to your agent. If you want the Power of Attorney to take effect only when a certain event described in the Power of Attorney itself takes place, we will use a "springing" Power of Attorney. A springing Power of Attorney is used when you want your agent to use the Power of Attorney only after your agent believes you are incapacitated and/or you are certified by your treating doctor as being incapacitated. Incapacity occurs when you are no longer able to manage your personal and/or financial affairs.

Should I Wait Until I'm Sick to Give My Power of Attorney Document To My Agent?

You should keep your Power of Attorney in a safe place until it is needed. Always make sure your agent knows where you are storing your original Power of Attorney.

Does the Power of Attorney Take Away Your Rights?

No, absolutely not. Only a court can take away your rights in a guardianship proceeding. Your agent simply has the power to act along with you or on your behalf.

Can You Change Your Mind and Fire Your Agent?

Yes. You may revoke a Power of Attorney at any time. All you need to do is send a letter to your agent telling the agent that his appointment has been revoked. However, it is usually best if you have the letter revoking the Power of Attorney sent by your lawyer. From the moment the agent receives the letter, he or she may no longer act under the Power of Attorney. It may also be prudent to record a copy of the revocation in the courthouse.

Can an Agent Be Held Liable for His Actions?

Yes, if you agree to pay the agent. In general, the agent is entitled to "reasonable" compensation for his services. However, in most cases, the agent is a family member and does not expect to be paid. If an agent would like to be paid and to avoid any future misunderstandings, it is best that he discusses this with you, you agree on a reasonable rate of payment, and you put that agreement in writing.

What If There Is More Than One Agent?

Depending on the wording of the Power of Attorney, the agents may not have to act together on all transactions. In most cases, when there are multiple agents, they are appointed "severally," meaning that they can each act independently of one another. Nevertheless, it is important for them to communicate with one another to make certain that their actions are consistent.

What Procedure Should My Agent Follow in The Event the Power of Attorney Needs To Be Used?

Your agent will need to present a signed Power of Attorney to conduct business for you. The bank or other entity relying on the Power of Attorney should make a copy of the Power of Attorney and return the original to the agent. Sometimes the entity requires they keep an original Power of Attorney. The agent should sign his name on any necessary documents as your agent. For example, if John Doe is the agent for Jane Doe, John would sign his name and then print that he is the "agent for Jane Doe" as follows:

John Doe (Signature)

Agent for Jane

Acknowledgement of Agent's Duties, Rights and Obligations.

The agent must sign the Acknowledgement of his duties, rights and obligations as set forth on the next-to-last page of the Power of Attorney. The Legislature of the Commonwealth of Pennsylvania has made the agent's Acknowledgement of his duties, rights and obligations as part of the Power of Attorney. The Power of Attorney is not legally effective and cannot be used by the agent until the Acknowledgement is signed. The agent does not need to be present when you sign the Power of Attorney and your signature is notarized. However, as soon as possible after your signature is notarized, you should have the agent sign the "Acknowledgement" in order to have the Power of Attorney become effective. By signing the "Acknowledgement," the agent is advised of his rights, duties and obligations as agent.

What Should the Agent Do If You Become Mentally or Physically Incapacitated And/Or Need Permanent Long-Term Medical And/Or Nursing Home Care?

Your agent should see an attorney to obtain legal advice, guidance and additional information beyond the scope of this summary. Your agent should never hesitate to seek expert advice from legal counsel, accountants, or investment counselors.

Your Agent Should Consult with You Whenever Possible Regarding Your Wishes and Desires.

Especially in circumstances where you are physically incapacitated and not mentally compromised, your agent should follow your direction. Even when you suffer from mental incapacity, your agent should make every effort to explain your choices to you and obtain your input and consent regarding decisions.

Can the Agent Make Gifts from Your Assets?

Unless the Power of Attorney specifically authorizes such action, the agent should never

  1. make gifts of your property to anyone, especially to himself
  2. transfer the title to any of your cash, bank accounts, or property into joint names with any other person
  3. change the beneficiary designation on your life insurance or employee benefit plans or other rights and benefits from whoever is currently named as beneficiary

Generally, your agent does not take title to your assets to manage them under your Power of Attorney; rather, under the Power of Attorney, your agent will have access to your assets to use them for your best interest.

What Kind of Records Should the Agent Keep?

The agent is required to keep complete records of his actions under the Power of Attorney. That is the best way to be able to answer any questions anyone may raise. The most important rule to keep in mind is not to mix the funds the agent is managing with his or her own money. Keep the accounts separate. The easiest way to keep records is to run all funds through a checking account. The checks will act as receipts, records, bank statements, stock and mutual fund records of payments, withdrawals, transfers, disbursements and tax return information. If all records are properly kept by the agent, it will be an easy task for an accountant to reconstruct all financial actions taken by the agent pursuant to the authority granted to the agent in the Power of Attorney. Your family members should also have the right to ask your agent to provide a yearly summary of actions taken by him on your behalf as authorized by the Power of Attorney.

When Does the Agent's Authority Terminate?

Your agent must stop acting on your behalf when he has actual knowledge that you revoked the Power of Attorney, or at your death.

Attorney Maureen Kroll provides services in Westmoreland County, PA, including the communities of Greensburg, Irwin, Jeannette, Ligonier, Mt. Pleasant, North Huntingdon, Latrobe, and Scottdale.

 

Return to Top



Designed by Chroma Marketing Essentials