What is a Power of Attorney?
What Should You do if You are Named as a Power of Attorney?
What Should You do if a Power of Attorney is Rejected?
What is a Power of Attorney?
A durable power of attorney is a simple legal document where you choose who will manage your finances and who will make medical decisions for you if you are unable to do so yourself. The purpose of a power of attorney is to plan ahead in case you are hospitalized after an accident or if you become disabled. Powers of attorney also allow your family to assist you as you age.
A simple power of attorney can be an extremely helpful document because it allows you to choose who will assist you when you need help. Without a power of attorney, your family members will need to go through a guardianship proceeding—an expensive and time-consuming process—to be able to assist you. Regardless of age, a power of attorney is a simple, useful document that everyone should have.
An attorney can quickly help you draft a power of attorney and ensure that it meets your needs. There are also some free powers of attorney you can find online and other resources that charge a small fee for a basic form power of attorney. These do-it-yourself forms can be effective, but there is a risk that a small error could have large consequences. Working with an attorney can reduce the risk of error and ensure that your power of attorney accomplishes your goals. Usually, the cost for drafting a power of attorney is low and worth the added protection; if you have questions about drafting a power of attorney or the cost to do so, please call us at (206) 624-6271.
What Should you do if You Are Named as a Power of Attorney?
Being named as a power of attorney can be confusing. It may be unclear what you are required to do, what you are allowed to do, and what risks you face. If you are named as a power of attorney and have decided to start helping your family member, you should meet with an attorney to discuss your responsibilities. A short meeting or phone call (usually 30 minutes) can help you avoid serious problems and help prevent you from being sued.
Obtaining the legal guidance from an attorney is well worth the fees as it can help you avoid significant litigation costs in the future. In some cases the attorney’s fees for your meeting can be paid from the funds of the person you are representing. This means that you will not need to personally pay for the cost of the meeting.
Acting as a power of attorney is a serious responsibility and should only be accepted after understanding the consequences and your responsibilities. It is surprisingly common for powers of attorney to be challenged or sued by angry family members, even in close and families. With some simple steps and the guidance of an attorney, you can greatly reduce the risks of dispute or lawsuit.
If you are chosen to act as a power of attorney here are a few things you should consider:
- Always Act in the Best Interest. As a power of attorney, you are required to act in the best interest of the person you are acting for. Any action you take that benefits you personally will violate your duties and subject you to liability.
- Keep Perfect Records. It is very common for a power of attorney to be sued by upset family members even in close families. Keeping perfect records of everything you do can help protect you if a family member challenges any of your actions. You should keep all receipts, keep bank records, and keep notes on the reason for any actions you take.
- Assume you will get sued. From the start, assume that someone will get mad and sue you claiming you mismanaged assets and stole funds. This way you will exercise caution in everything you do and protect yourself.
- Look from the outside. Before taking an action, ask how it looks from the outside. For example, before you hire your son to cut the grass ask yourself “how does this look from the outside.” Did you have a contract? Did you pay your son more than market rate? Did you review his work to make sure he did a good job? Did you keep good records to show why you were paying your son?
- Track your time: As a power of attorney you can charge for the time you spend acting as the power of attorney. Track every minute you spend working. Do this even if you do not intend to charge for your time. Many times, family members begin acting as a power of attorney with no intent to charge. After realizing how much work it is, powers of attorney often change their mind. If you have not kept consistent records of your time, you will be unable to go back and charge for the time you spent.
Again, if you decide to act as a power of attorney it is important that you are aware of your duties and responsibilities so that you can properly protect yourself. Small mistakes can lead to lawsuits even if you have been doing your best to act honestly. The best way to protect yourself as a power of attorney is to meet with a knowledgeable attorney to discuss your role and responsibilities.
What Happens if Someone Refuses to Accept my Power of Attorney?
Unfortunately, it is all too common for a bank or other business to refuse to accept a power of attorney. It can be an extremely frustrating and time-consuming process arguing with these entities trying to use the power of attorney.
Luckily, there are ways to solve this problem. Banks are required to accept your power of attorney if it is valid, it may just take a little work to convince them to accept it. Often, a simple phone call from an attorney can be enough to change a banks mind. If a phone call doesn’t work, there is a legal procedure to take the bank to court and force them to not only accept the power of attorney, but also to pay your legal fees for doing so. This is a win-win for you as the bank accepts the power of attorney and pays your legal fees.
If you are having trouble using a power of attorney call to schedule a time to talk with one of our attorneys to discuss your options and the best strategy for moving forward by calling us at Reed Longyear. With a little help, you can get past the difficult roadblocks and begin helping your loved ones as they intended.
Here at Reed Longyear we assist families with drafting powers of attorney and with teaching families how to properly use a power of attorney. We can also assist you if a bank or other business has refused to accept your power of attorney.
If you have any questions about powers of attorney, you can reach us at (206) 624-6271 to schedule a phone call or in person meeting with an attorney so we can assist you.