Financial POA agent Nomination
By Erin Fielder-Attia
WHAT TO DO IF YOU ARE APPOINTED AS AGENT UNDER
SOMEONE’S POWER OF ATTORNEY FOR FINANCES
By Erin Fielder-Attia
When you (the principal) are working with a lawyer preparing power of attorney documents, you will most likely be receiving lots of legal advice. But what about if you were nominated as someone else’s attorney-in-fact (agent)? Most likely, you were not included in the discussions while drafting the documents or even present at the signing. More than likely, you had no idea you were even nominated. So, now what?
Here are some important steps you should take once you have appointed as a principal’s agent:
1. READ THE ENTIRE DOCUMENT
Now, this may seem obvious, but the first thing you should do once nominated as a principal’s agent, is read the Power of Attorney (POA) document. Legally, you must act according to the standards of the Michigan prudent investor rule as defined by MCL 700.1501 -1512. In other words, you must “exercise reasonable care, skill, and caution” as a prudent investor would. So it is important to have a thorough understanding of the principal’s wishes, as depicted in the Power of Attorney document.
2. STORE IN A SAFE PLACE
Make sure to keep a copy in a safe yet easily accessible place so it is readily available. This is a document that you may use frequently, so it is important to keep it on hand.
3. UPDATE FINANCIAL INSTITUTIONS
It is important to update the principle’s bank and investment accounts as soon as possible to reflect your new role. Contact the bank and ask a representative what they require to add you to the principle’s account. This is not the same as joint ownership. Keep in mind that you mustkeep all money belonging to the principle separate from your own funds.
4. KEEP DETAILED ACCOUNTING RECORDS
Make sure to include both physical checks as well as electronic payments and debit card transactions. Carefully review each bank statement and reconcile it to a check register. Maintain a file with copies of all financial statements, bills, invoices, and receipts. You may even consider using an accounting software program to assist with maintaining accurate accounting records.
5. SET UP AN ALLOWANCE FOR THE PRINCIPAL
You may find that the principle is reluctant to accept that they are at a stage in life where they need extra help. They may continue to make spending mistakes, even with your involvement. Giving them a credit card with an appropriate limit or a re-loadable debit card is one way to allow them some independence while still protecting their assets.
Becoming an agent for a friend or loved one should not be taken lightly. If managed well, you will help them live with the security of knowing their assets are protected and under watchful stewardship. This additional support might even become essential in the care and wellbeing of your loved one.
Always remember, professionals, such as attorneys, accountants, and financial advisors are all available and able to assist you.