If you are a person who is elderly, has disabilities, or is otherwise unable to handle your own affairs, power of attorney documents are one effective way to receive assistance in handling your affairs. These documents generally allow a person to appoint another person to act as their “agent” in matters such as paying bills and transferring assets. While having an agent via power of attorney can come in handy when you are unable to handle your own affairs, it is important to consider who you select as your representative before granting them power of attorney. In some cases, an agent under a power of attorney can make decisions on your behalf that you disagree with, or which could result in financial harm for you.
What Can Happen If You Do Not Choose an Agent Carefully?
A power of attorney document gives a considerable amount of authority to the person of your choosing. When creating this document, it is important to understand what rights and powers your designated agent will have, and what risks you are taking by appointing this person to represent you. In some extreme cases, an agent appointed by power of attorney could take drastic actions that would cause substantial damage to your finances and property – such as transferring the ownership of your real estate to themselves, even if the right to do so is not clearly defined in your power of attorney document.
As an example, suppose that you appoint a nephew of yours as your power of attorney. By giving this individual the authority to make financial decisions on your behalf, you are giving him the power to transfer ownership of your property as they deem necessary. This person could potentially use this power to transfer your real estate to themselves or a third party for their own personal gain. While this is clearly against your best interest, they could argue that they took that action to protect your interests; you would then have to prove otherwise, and that they acted outside of their duties as your agent in order for a court to overturn their decision.
If you were to find yourself in a situation like this, you would need to file an action against your agent in court in order to regain control of the assets that they transferred to themselves. The agent’s actions could also be challenged on the grounds that they acted outside of the authority granted by your power of attorney document, or that they acted in a breach of their fiduciary duty – the legal obligation they have to act in your best interest. In either case, the process can be complex and confusing. For these reasons, it is extremely important that you choose your agent carefully and avoid the temptation to appoint a friend or family member without careful consideration. You should ensure that they are willing and able to serve as your agent and that they have the expertise necessary to handle the duties associated with serving as your agent. It is also advisable to choose someone you trust, rather than a friend or relative who might act on their own behalf and at your expense.
Ledwidge & Associates
