Financial Power of Attorney – Understand what you are signing.

A Power of Attorney (POA) is a legal document that authorizes someone to act on another’s behalf regarding financial affairs. A POA is a legal document that must be completed by the person (referred to as the “principal”) while he or she is of sound mind. A Power of Attorney document should never be drafted by coercion or force, but is best planned well ahead of the time it may be needed and be well thought out. It is crucial when identifying and choosing a person to act on your behalf that you know the person well and trust them implicitly. The person you choose will be called the agent or the attorney-in-fact. If a change in this relationship occurs such as death or divorce, this document should be reviewed and changed as needed.

There are two options when drafting this document in the state of Minnesota, one providing the agent general power over all of the principal’s affairs and one that is limited and provides power over selected portions of the principal’s affairs, which may include things like paying bills; buying, selling and paying taxes on property; investing money or handling banking transactions and so forth, as specified by the principal.

When another person is given power to act on the principal’s affairs, it does not mean that the principal necessarily gives up that role as it may be / should be shared with the agent who has been named if the principal has the capacity to do so. The principal does not simply lose the right to control their own financial matters when a POA is signed. The principal can take back (revoke) the POA at any time. One should be cautioned that the named agent has the right to act without the principal once given the authority and in some cases this leads to a unexpected signficant financial impact on the principal. Though justly an agent should be working hand-in-hand with the principal, this is not always the case. The agent must keep a record or accounting of any transactions they undertake and they are supposed to make these decisions and take actions that are in the best interest of the principal.

A principal is able to select more than one agent and if done it is important to identify on the document whether or not each of these people can make decisions independent of each other or whether they must ask permission of the other(s) and proceed cooperatively. The principal can also list the agents in succession identifying who is first, who is second should the first person be unavailable and so forth.

A skilled care manager may be called upon to assist an agent in understanding an older adult principal’s housing, health and Minnesota home care needs to better prepare for proper management of assets and expenditures.

Posted in Health Care Advocate, Legal Documents, Nursing Care Management, Vulnerable Adults

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