Power of Attorney Asset Mgmt

Myth #1:  I don’t need a written authorization to help my loved one write out checks and pay bills

Although you may be assisting your loved one altruistically, there may be legal ramifications

that you could be acting incorrectly.  A Power of Attorney for Asset Management (POA) is an agent that has legal authority to manage the assets of someone who in incapacitated permanently or temporarily.  This requires you to understand the duties that you can perform and what authority you have in that capacity. 

Even if you are not an appointed POA agent, a court and/or other family members will consider you a de facto POA agent.  As a de facto POA agent, you are making decisions and acting as your loved one’s agent, and you could be found liable to account   the actions you have taken and how you managed the assets and property of your loved one.

A POA agent does not generally have the authority to buy or sell property or real estate.  Any negligence or carelessness with records and proof of actions you have taken are a lawsuit just waiting to happen.

Myth #2:  I am my mother’s POA agent, so I can sign HER name to checks

As a POA agent for anyone, including a parent, sibling, or grandparent, to name a few, you should not be signing their name for them on any documents.  If you need to sign under your authority as a POA agent, you should sign with a designation as the POA agent, so that there is no issue of forgery or exceeding the authority of the signed POA.  For example, you should sign any documents for your loved one as: “Jane Doe by John Doe, POA.”

Myth #3:  If I already have a signed POA giving authority to someone, I can just revoke it by tearing it up and throwing it away.

Under the laws of California, it is simply not sufficient to destroy a copy of your signed POA to revoke it.  Like Living Trusts and Wills any subsequent POA you sign and authorize, must specifically state that all previous POAs are revoked and no longer have any authority.  If you are unsure of the actions you should take in these situations, you should speak with an Estate Planning Attorney to ensure that you have appropriately revoked or nullified your previous

POAs.

Myth #4:  Under a POA there is no limit to the actions that I can take as the agent to my loved one

An executed POA does have limits to what the agent can do.  While California has guidance on a format that they expect to be followed, you can add or take away articles of the POA as you see fit.  POAs can vary greatly and can incorporate broad discretion if it is drafted correctly.  An Estate Planning Attorney is best suited to assist you in making decisions about the authority you wish to grant to your POA agent. 

However, you should always be as specific as possible when drafting your POA.  As the agent, you are expected to carry out the wishes as stated in the POA.  You cannot take actions that you may believe are in the best-interest of the creator if they have specifically stated otherwise in the signed POA.

One thing to remember is that a POA is only effective during the lifetime of the creator.  That makes sense when you consider that a POA is generally for times of incapacity and once someone who created a POA has passed away their Living Trust or Last Will take over.

Myth #5:  I have an executed a POA from the past and don’t need to revise it

As with any of the documents in your Estate Plan, you should routinely review them for accuracy and the current terms are still your wishes and the authority is still what you want to grant to your POA agent.  Not every State has the same rules on what your POA agent can do under the authority of the document.  Additionally, laws, regulations and ethical considerations can make POAs from the past obsolete or voidable. 

It is important to review and update your POA to reflect the current requirements.  This is avoid your agent from encountering any obstacles or roadblocks should the situation arise where the POA needs to be invoked.