A power of attorney is among one of the most important incapacity planning documents you can have. It designates someone you trust with taking care of your affairs if you become unable to do so.

In a power of attorney, you give one or more trusted people of your choice the right to manage your affairs if you cannot do so because of a medical emergency, mental incapacity, or other life event.

Every state has its own rules for the format, content, and provisions of powers of attorney. In New York, for example, the statutory form states that, once executed, the POA shall not be affected by a person’s subsequent incapacity unless they have specified otherwise in the form. This is often referred to as a durable power of attorney.

A power of attorney may be helpful in avoiding confusion among your family members and loved ones by putting specific people in charge of your affairs ahead of time. For example, you could appoint your spouse as well as a professional as co-agents, separate agents, or primary and secondary agents in your power of attorney.

Agency Further Explained

Many POA forms allow for a variety of options in designating who may act as your agent. First, you will have to designate your primary agent.

Depending on the rules of your state, this can be one person or more than one person. They may be able to act independently of each other, or you may be able to require that they act together. These technicalities are usually form- and state-specific.

In most POAs, you also have the opportunity to choose a successor or “backup” agent. Again, this can be one or more person(s) who may act separately or together. In some instances, you may be able to provide specific rules of succession.

Powers Conferred on Agents

A POA gives your agent(s) control over a wide range of subject matter. This can include the following:

– Real estate transactions
– Purchase of personal property or other goods
– Banking, bond, stock, brokerage, and other transactions
– Business operations
– Insurance matters
– Estate transactions
– Claims and litigation
– Personal and family maintenance
– Signing agreements on your behalf
– Dealing with your creditors
– Gifting
– Management of benefits from governmental programs or civil or military service
– Financial matters related to health care (records, reports, and statements)
– Retirement benefit transactions
– Tax matters

Many states do not allow a POA to confer power on an agent to make medical or health care decisions on your behalf. Instead, this must be done through another form, such as a health care proxy.

Legal Responsibilities of Agents

Most state laws have specific sections that govern the legal responsibilities of an agent acting pursuant to a POA.

An agent, dual agent, or successor agent has a fiduciary relationship with the principal and, as a result, the following duties:

– To act according to any instructions of the principal or, if no instructions are available, then in the best interest of the principal.
– To avoid conflicts of interest.
– To keep the principal’s property separate and distinct from any other property owned or controlled by the agent.

However, many states specify this does not apply to property jointly owned by the principal and agent at the time of the execution of the power of attorney. It also may not apply to property that becomes jointly owned after the execution of the POA.

– Not to make gifts of the principal’s property to himself or herself without specific authorization in a power of attorney.
– To keep records of all receipts, disbursements, and transactions entered into by the agent on behalf of the principal and freely disclose to third parties if requested by the principal.
– To share such records with: any monitor, co-agent or successor agent named in the power of attorney, any government entity investigating whether the principal needs protective services or is being abused or neglected court-appointed evaluator or guardian ad litem, guardian, or conservator of the principal personal representative of deceased principal, and any other persons designated by law.

Agents can be liable for conduct or failures to act that violate any fiduciary duty. A state’s law will usually define the extent of their liability, so it is important to become familiar with this law before entering into a POA or agreeing to serve as an agent.

When Does a Power of Attorney Become Effective?

A power of attorney can be durable or springing. The terms of a power of attorney usually become effective when the agents and principal sign it, or upon the occurrence of an event specified in the document.

Disputes Between Dual Agents

If you have elected to have dual or co-agents, you should consider whether you wish for them to be able to act concurrently or separately. Each agent has equal power to decide on the matters that the principal has specified in the POA.

However, if you have specified that the dual agents must act together and they disagree about what action is in your best interests, they could find themselves in court, needing a judge to act as the tiebreaker, so to speak.

Waiting for a judge’s decision can cause a delay in situations where this is not desirable. For example, if a health aide needs to be hired, or government benefits need to be applied for, and there are disagreements, this could impede appropriate care.

For this reason, many professionals recommend avoiding these situations by allowing agents to act separately, not choosing people who have the potential for conflict, or appointing one primary agent and a successor agent.

A successor agent can step in where your primary agent is unable or unwilling to serve. In addition, you may be able to appoint a monitor, which is a person who can be kept informed of decisions and actions your agent is taking. As mentioned above, if your state permits the appointment of a monitor, they are entitled to a record of all transactions done or made on a principal’s behalf. The monitor can obtain this information from the agent or third parties upon request.

Can I Terminate the Power of Attorney?

You can terminate a power of attorney if you see fit, as long as you are of sound mind. There are several ways to end a dual power of attorney. You can terminate your dual power of attorney in the following ways:

– Put it in writing and notify all parties to the power of attorney – the agent, co-agent, successor agent, monitor, etc.
– If the situation is more complex, a third party may be able to file an action in the appropriate court and ask the court to remove or replace the agent.

A power of attorney will also terminate in the following circumstances:

– The death of either the principal or an agent
– The roles and responsibilities of serving as agent have been completed (for example, where a power of attorney is solely for purposes of completing one real estate closing or transaction)
– A clause in the power of attorney provides that the arrangement would end once triggered

Setting up a power of attorney requires the expertise of a professional, especially because POA laws vary by state. Give our office a call at 601.925.9797 or click here, so we can provide guidance and ensure that your power of attorney meets Mississippi’s requirements.