Once you find yourself in a situation where you need a power of attorney because you cannot handle a task personally, the first logical question is likely to be: ‘’Who is the best person to be a power of attorney agent?’’
The answer to this question and the choice of an agent will determine how effectively and efficiently your choices and decisions will be executed. Although this decision may seem easy at first glance, that is not always the case.
Therefore, we will detail and explain how to choose a power of attorney agent, how to protect yourself from abuse of the provided authority, who can override a power of attorney, and more.
Let's get started!
What is a Power of Attorney, and What Duties Does it Involve?
A power of attorney (POA) is a legal document that a principal uses when they cannot undertake a task or make a decision themselves for various reasons and, therefore, need someone to do it on their behalf. In such cases, the principal authorizes an agent, also known as an attorney-in-fact, to make decisions on their behalf regarding finances, health, tax obligations, or representation in court.
So, when the principal and agent sign a power of attorney that meets all legal requirements (usually involving signing the document in the presence of witnesses and/or a notary public and the agent’s age), a legally binding relationship is established between them, characterized by mutual rights and obligations.
First and foremost, the agent must act diligently and in the principal’s best interest. That means that everything they do should align with the wishes and values of the principal. Therefore, they should have discussed these matters beforehand so the agent can be familiar with the principal’s aspirations, preferences, and perspective on specific issues.
Next, the agent should inform the principal of every action taken or decision made and the effects and outcomes of such acts. Based on this, the principal will be able to make further decisions on specific matters.
It is also essential that the agent operate within the limits of the power of attorney, meaning they do not exceed their authority. If this happens, the agent will be held responsible and required to compensate for any damage caused to the principal.
These are the general principles that an agent should follow when acting on behalf of the principal. Of course, their specific duties will depend on the type of power of attorney, so let’s learn more about them.
Types of Power of Attorney
There are six different types of power of attorney, including:
Power of Attorney Types
General POA: This gives the agent broad authority to manage many aspects of the principal’s matters, from finances to personal ones. The agent can make a wide range of decisions on the principal's behalf.
Special (Limited) POA: Special POA restricts the agent’s authority to specific tasks or decisions. The agent can only act in designated areas, as determined by the principal.
Durable POA: This type of POA remains effective even if the principal cannot make decisions. The agent continues to act on the principal’s behalf even if they become incapacitated.
Health Care POA: Health care power of attorney allows the agent to make medical decisions for the principal if they cannot do so themselves. The agent can choose medical treatments or make other health-related decisions.
Springing POA: Springing POA only becomes effective when a particular event happens, so the agent starts acting on the principal’s behalf when that event occurs.
Financial POA: This type empowers the agent to handle the principal's financial matters, like managing bank accounts, investments, tax obligations, and property.
5 Qualities to Look for in a Power of Attorney Agent
When selecting an agent to act on your behalf, choosing an individual with specific qualities and characteristics is crucial. Given the seriousness of this document and considering someone will make decisions and take actions for your benefit, the following attributes are essential:
#1. Trustworthiness
Choosing someone you know and trust is essential when selecting an attorney-in-fact. This trusted individual should provide honest and transparent guidance on the most effective ways to handle matters requiring representation. They should explain the available solutions, typical costs, and procedural steps.
Having an open and transparent discussion with someone you trust ensures that you make well-informed decisions and feel confident in the direction your agent will take.
The reason why it's crucial to prioritize trustworthiness is that this individual will act on your behalf and make decisions that directly impact your interests.
#2. Organizational Skills
An agent with strong organizational skills is a necessity for effective representation. They should be skilled at managing their time efficiently, being punctual, and demonstrating high responsibility.
Your agent needs to thoroughly review and understand your case, familiarize themselves with all relevant details, tasks, and deadlines, and plan their activities with precision. Effective management of these aspects is crucial to prevent missed deadlines or overlooked details that could negatively impact your rights or interests.
So, make sure you empower a well-organized agent to handle the complexities of your case systematically and reliably, ensuring that everything proceeds smoothly and according to the plan.
#3. Availability and Willingness to Take on Responsibility
The agent you appoint must be both available and willing to fully embrace the responsibilities associated with their role. These qualities imply they should always be easily reachable, keep you regularly updated on their activities, and follow your specific instructions on handling various matters.
It is essential that they are prepared to commit to the role with seriousness and dedication, acting consistently in your best interest. Their availability should allow for timely responses and proactive management of tasks, ensuring they can effectively carry out their responsibilities and provide you with peace of mind.
#4. Decision-Making Capabilities
A critical attribute for your agent is the ability to make well-informed and sound decisions. This quality encompasses applying logical reasoning, carefully evaluating various options, and anticipating potential outcomes.
Effective decision-making involves thoroughly assessing the pros and cons, risks, and benefits of each choice. With this quality, your agent should be capable of selecting the most appropriate course of action based on a comprehensive analysis of all available information and making thoughtful and effective decisions.
#5. Understanding of the Relevant Matters
When appointing an agent, it is vital to consider their knowledge and experience in the specific area for which you require representation. A general background or degree in a related field does not always equate to expertise in a particular aspect of your needs.
For instance, an economics degree does not guarantee familiarity with specialized financial issues you may face. So, ensure the chosen person has practical, hands-on experience in the relevant field. This expertise will ensure they are well-equipped to handle the specifics of your situation effectively and competently.
Who Can Be a Power of Attorney Agent?
A power of attorney agent can be a family member, friend, or professional, such as a lawyer or accountant. However, it is important to know in which situations each of them is suitable to act as an agent, so let’s clarify this.
#1. Family Members
Choosing a family member as your agent is always a good option when it comes to trust, as family members are well-familiar with your values and preferences and are unlikely to make decisions or act contrary to those values.
You can also maintain constant communication with them, as they are likely always around you and available whenever you need to discuss certain matters. Additionally, there are practically no costs associated with choosing a family member as an agent.
However, appointing a family member as your agent can also have drawbacks. You can see that when tasks require specific expertise that family members may lack. In such cases, appointing them as an agent can do more harm than good and put you in a difficult position when a decision needs to be made promptly in areas they are not familiar with.
Moreover, if they need to decide whether you should undergo a medical treatment that could save your life, they might be under more significant stress and pressure due to their emotional relationship with you and may not be able to make a rational decision.
#2. Friends
A close friend can be a good choice if you need someone who knows you well but can remain more objective than a family member. A trusted, long-time friend will also act in your best interest without a doubt, as they are well familiarized with your values.
On the other hand, the same disadvantages that apply to family members also apply to friends. Therefore, emotional involvement, lack of expertise, and potential strain on your friendship are reasons why you should carefully consider whether choosing a friend as an agent is wise.
#3. Professionals
Professionals are the right choice when it comes to complex tasks and decisions. They possess the necessary knowledge, experience, licenses, and everything else required to represent you in court, before tax authorities, or when negotiating with potential business partners.
Unlike family members and friends, professionals are guided by rules and rationality in their decision-making, excluding the subjective feelings they might have towards you. They generally act according to ethical and business codes to elevate their results and reputation to a higher level, so you can be sure that you have authorized the right person.
However, hiring professionals can also have specific weaknesses. First and foremost, there are the costs. Authorizing professionals, such as lawyers, is associated with expenses that can be high and might be beyond your budget.
Also, they might not have a personal connection or deep understanding of your values as family members and friends have. You should be aware that you are probably not their only client, so their time is limited, and you may not always be able to reach them as quickly as you can with friends and family members.
#4. Multiple Agents
If you have complex tasks requiring different expertise, authorizing multiple agents is the best choice. This way, you can ensure that each agent can respond to your needs within their area of practice.
Additionally, you can appoint multiple agents in the same field, which is helpful if the first agent cannot act, allowing the second agent to step up and complete your tasks.
On the other hand, appointing multiple agents entails higher costs if they are professionals. Also, conflict between agents can arise if they have different opinions and cannot reach a consensus on a particular decision.
To prevent these potential problems, it is necessary to clearly define the scope of authority for each agent and the rules and values they should adhere to in the power of attorney document. This way, you will express their tasks and authority, prevent potential conflicts, and ensure they monitor and balance each other.
How to Choose the Best Person to Be a Power of Attorney Agent
To choose the best person to be a power of attorney agent, you must consider several factors, as this person will represent your interests and make important decisions on your behalf.
First, consider the nature of the tasks or decisions the agent must undertake. If these are simple decisions or actions that don’t require special knowledge or experience, you can authorize a family member or friend. Otherwise, if you are dealing with complex matters, you’ll need professionals with the necessary expertise.
Next, focus on trust. The agent should be someone you trust unconditionally, someone who understands your values and is willing and able to take on the responsibility of acting on your behalf. This criteria applies to family members, friends, and professionals. Entrusting someone reliable with a task is half the job done.
Geographic proximity is also an important factor. An agent who lives nearby can respond more quickly in emergencies and handle tasks requiring a physical presence, which is especially important for critical decisions like healthcare.
Think about appointing a sub-agent. A sub-agent can check on and balance the primary agent and step in if the primary agent cannot complete their duties.
Before making your decision, you should have a thorough conversation with the potential agent. Discuss your ideas and values; explain what is good for you and what isn’t. Also, listen to their opinions and viewpoints to assess if they are the right choice.
4 Common Mistakes to Avoid When Choosing a Power of Attorney Agent
Choosing the right person to act as your power of attorney agent is crucial for safeguarding your financial, medical, and other interests. With that in mind, here are four common mistakes to avoid when making this important decision:
Power of Attorney Agent Mistakes
Not discussing your wishes in advance. Failure to clearly communicate your expectations and desires with your chosen agent can lead to confusion and potential conflicts as they might take actions you disagree with. So, have open discussions with your agent from the beginning and address any concerns or updates as they arise.
Ignoring potential conflicts of interest. Be cautious not to select someone with personal or financial interests that could conflict with their role as your agent. Such conflicts influence their decisions, potentially leading to actions that are not in your best interest. Choose an agent who can commit to you and focus solely on your needs.
Selecting someone much older than you. While experience is valuable, choosing a significantly older agent can create complications. They might not be as familiar with modern practices or technologies, which can impact their effectiveness. Moreover, there is a risk that they will become unable to fulfill their duties due to health or other issues.
Not considering the agent's expertise and organizational skills. Choosing an agent with the right knowledge and skills is crucial for effectively managing your affairs. This expertise is key when deciding on how to choose the right power of attorney agent, as their ability to handle these responsibilities will directly impact the management of your affairs.
Final Thoughts
Given the seriousness and importance of a power of attorney document—where you authorize a third party to act on your behalf and manage your affairs—it's crucial to place such authority in the hands of the right person.
When considering who is the best person to be your power of attorney, it is essential to evaluate their qualities carefully. Considering the responsibilities and demands of modern life, you will inevitably, at some point, need to appoint someone else to represent your interests in certain matters.
When that time arrives, choose an agent with the necessary qualities to ensure success, expertise, and dedication. This approach will guarantee that the person you appoint can effectively handle your affairs with the care and proficiency you require.
Power of Attorney Abuse FAQ
No, choosing a power of attorney is optional. However, appointing an agent to make decisions on your behalf if you are unable to do so is very useful.
To appoint a power of attorney agent, complete and sign a power of attorney document. You can use our Contracts.net POA builder to easily create legally valid power of attorney forms.
You should avoid individuals who may have conflicts of interest, who are financially irresponsible, or who are in a strained relationship with you.
You should consider close family members, friends, or attorneys who have a good relationship with your parents.
Your spouse can be your power of attorney agent if you trust their judgment and ability to handle your affairs.
