Have you been named as an Attorney-in-fact on a family member’s Power of Attorney (POA)? Your responsibilities may vary depending on the size of the assets in question and on what powers your loved one had granted to you.
Manage Business Affairs
If your family member owns part or all of a business, you may be in charge of helping to run that business or hiring someone to manage daily activities. As the attorney-in-fact, you will be able to make business decisions that benefit your loved one and sign documents on his or her behalf.
Your duties will likely include the ability to receive your loved one’s income. You may use this income only for the living expenses and medical care of the disabled individual and his or her family.
You may have to manage property, both personal and real. If you are managing real estate, your duties may include collecting rents, ensuring repairs are done and paying mortgages. In extreme cases, where money is needed for bills or medical care, you may assist with the sale of personal or real property at fair market value.
As attorney-in-fact you may be in charge of all estate financial accounts including: checking, personal savings, investments and retirement savings. All funds in these accounts should only be used to pay for expenses of the disabled individual and his or her immediate family. You may even manage current investments or invest funds in new ventures in order to provide your loved one’s estate with additional income. In such case, it is wise to get the advise of a professional in the investment field.
Durable versus Springing
The power of attorney that your loved one signs will be either Durable or Springing. If the Power of Attorney is Durable, you will have the ability to act as the attorney-in-fact as soon as the document is signed and notarized. A Durable Financial Power of Attorney is often used by married couples to allow the other to handle business arrangements or marital assets if one spouse is briefly unavailable.
If your family member signs a Springing Financial Power of Attorney, you will not become attorney-in-fact until he or she is diagnosed as mentally incapacitated by a doctor or doctors. This type of power can create financial hardship until the bank is convinced of the incapacity. Whether the document is durable or only springing, as attorney-in-fact, you must always act in the interest of the POA signer.