Acting as an Agent under a Power of Attorney
Establishing the Authority of an Attorney-in-Fact
Aug 18, 2008
Once you receive a power of attorney authorizing you to act as someone’s agent or attorney-in-fact, the first thing to do is read the document thoroughly. Reread it if you have to, until you understand exactly what authority the principal has granted you. Consult a lawyer if anything in the document is unclear.
Also ask if there are things the law flat out won’t allow. In some states, for example, acting as an agent doesn’t allow you to carry out a personal service — painting a portrait, for instance — that the principal committed to, or to assume the principal's responsibilities as a guardian.
Convincing people you’re an authorized agent.
Contact the bankers, stockbrokers and realtors you’ll have to deal with as agent and let them know you have the authority to do business for the principal. You may have to show them the original document, but since that has to be preserved, ask if they’ll accept a “certified true original” copy prepared by a financial professional.
If you have to show the original document to anyone out of state, send it by overnight mail and insist it be overnighted back.
Fear of fraud
Some institutions may not accept the power of attorney at face value: For all they know, it could have been forged or executed improperly; the principal might have been mentally incompetent when they signed it, or have revoked it since it was written. If you have a springing power of attorney — triggered under certain circumstances — they may wonder if the trigger event has taken place. The older the document is, the more suspicion you may encounter.
For these reasons, you may be asked to jump through hoops: Provide proof the spring power of attorney is in effect; fill out the institution’s own power of attorney forms; or swear in an affidavit that you’re using your authority in a valid fashion.
In some states, the law may require banks and other businesses accept you as agent whether or not you meet their terms; in others, you may have to accept their requirements. If you’re unsure of the law, or want to know if the affidavit will cause problems later on, consult an attorney.
Advance notification
If you’re using a springing power of attorney — activated by your parents’ becoming incapacitated, for instance — you may have to make decisions at short notice, and having to prove yourself will slow things down. To prevent this, find out which businesses or people you’ll be dealing with as agent and notify them in advance. If they have requirements, it’ll be easier to meet them ahead of time, when there’s no pressure.
Look honest
Even if your actions are completely ethical, you need to avoid looking unethical. Putting your principal’s money in your account may make it easier to manage, but if you’re not specifically authorized, it could look as if you’re ripping the principal off. Keep the money streams separate and keep records of everything you do as agent, in case your honesty is ever challenged.
