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Understanding the Role of an “Agent” Under Your Power of Attorney

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When you hear the term “agent,” your first thought might be a real estate agent–someone you hire to sell your house on your behalf. But there are other types of agents, especially in the context of estate planning. For example, if you have a power of attorney–and you should have one–that document names an agent to act in your name with respect to certain business and financial matters.

Of course, when you hire a real estate agent you tend to look for certain professional qualifications. But when people sign a power of attorney, they often simply designate a spouse, child, or family member as their agent without stopping to think if that is the best decision. After all, you may love your oldest child, but what if they aren’t the most financially responsible person? Can you really trust them with broad power to manage your property in the event of your incapacity?

Your Agent’s Fiduciary Responsibility to You

One thing to keep in mind is that any type of agent has a “fiduciary responsibility” to the principal, i.e. the person who signed the power of attorney. Fiduciary responsibility is basically a fancy way of saying the agent is expected to act in the best interests of the principal, not themselves. Among other things, this means:

  • Your agent may only perform those acts authorized by your power of attorney.
  • If your agent is allowed to manage any of your assets, he or she must do so as a “prudent investor” would under similar circumstances.
  • Your agent should keep written records of every action they take on your behalf, so they can provide you with an accounting if you request one.
  • If an agent is unsure of their rights or responsibilities, they should consult with a qualified attorney who can advise them as to the law.

Also keep in mind, the level of fiduciary responsibility tied to an agent may vary with his or her own expertise. For instance, let’s you name your daughter as agent as power of attorney. She also happens to be a certified public accountant. In this scenario, the law expects her to use her “special financial skills or expertise” in managing your finances.

Financial vs. Health Care Powers of Attorney

Up to this point, we’ve only discussed powers of attorney for financial matters. But your estate plan should also include a health care power of attorney, which is also known in Florida as a “Designation of Health Care Surrogate.” Similar to a financial power of attorney, a health care surrogate is an agent you designate to “provide informed consent for medical treatment” on your behalf–or to withhold treatment–in the event you are unable to communicate with your doctors.

Please note that financial and healthcare powers of attorney are not interchangeable. In other words, if you are lying in a coma and your son shows up with a financial power of attorney naming him as your agent, the hospital cannot accept that. While you are free to name the same person as agent under both your financial and health care powers of attorney, the designations need to be made in separate documents.

If you have additional questions or concern about how powers of attorney work, the experienced Fort Myers estate planning lawyers at the Kuhn Law Firm, P.A., can help. Call us today at 239-333-4529 to schedule a free confidential consultation today.

https://www.kuhnlegal.com/own-a-florida-business-make-sure-you-name-the-right-executor-for-your-estate/

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