What is the law on....

Wednesday, May 2, 2012

What are my Agent’s Obligations?

What are my Agent’s Obligations?

Your agent has special legal duties. These are called fiduciary duties. A fiduciary duty is the highest duty known in the law. Your agent owes these fiduciary duties to you. Your agent also owes these same duties to your guardian and conservator.

Your agent has a fiduciary duty to act only within the powers you give in your power of attorney. (S)he must follow your instructions and expectations. When in doubt about your expectations, your agent must act in your best interest. Your agent must be loyal to you and act in good faith, with care, competence and diligence. If you select your agent because of his or her special skills or expertise, those skills and expertise are considered in determining whether your agent acted with care, competence and diligence. For example, if your agent is an attorney, (s)he will be held to the standard of care, competence and diligence for an attorney as opposed to the standard for an agent with no legal education and experience. Your agent must cooperate with your other agents, including your agent for health care decisions, and try to implement your estate plan if it is in your best interest. If you think your agent may have violated these duties, or if you are an agent and need advice on your duties, contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Your agent must carry out his or her duties for your benefit only. Transactions by your agent that benefit your agent (called self-dealing) are presumed improper. However, if your agent acts in your best interest with care, competence and diligence, then (s)he is not liable solely because:

· (S)he also benefits from the transaction;

· (S)he has an individual or conflicting interest in relation to your property or affairs; or

· The value of your property or estate declines.

Nevertheless, your agent must avoid any conflict of interest that would impair his or her ability to act in your best interest. If you think your agent may have engaged in self-dealing or you are an agent concerned about a potential conflict of interest, contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Your agent must keep a record of all receipts, expenditures and transactions made for you. Contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com for help with these records.

Your agent must inform you if (s)he knows that your co-agent has violated, or is about to violate, the co-agent’s fiduciary duty to you. Likewise, your successor agent must inform you if (s)he knows that your former agent violated his or her duty to you. Other than these obligations of disclosure, your successor agent or co-agents are not liable for a breach of duty by your other agents unless they participated in the breach. If you think your co-agent or former agent violated their duty, or you are an agent concerned about another agent’s actions, contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Unless it is expressly permitted in your power of attorney, your agent cannot delegate his or her duties to another person or business. You should be very cautious about allowing delegation. If you think delegation may be necessary, you should specify in your power of attorney exactly what powers, and under what circumstances, your agent can delegate and to whom they can be delegated. If your power of attorney allows delegation, your agent is not liable for the act, error of judgment or default of the person or business (s)he delegates to unless your agent did not exercise care, competence and diligence in selecting the person or business. If you select your agent because of his or her special skills or expertise, those skills and expertise are considered in determining whether your agent acted with care, competence and diligence in selecting the person or business. For example, if your agent is an accountant, (s)he will be held to the standard of care, competence and diligence that an accountant should use in selecting the person or business. Before allowing your agent to delegate his or her powers, get advice by contacting Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Although not advisable, your power of attorney can provide that your agent is not liable for breaching these duties. However, such a provision will not protect your agent if:

· The provision is the result of your agent abusing his or her confidential or fiduciary relationship with you; or

· Your agent acted dishonestly, with an improper motive, or with reckless indifference to your best interest or the purpose of your power of attorney.

Don’t exempt your agent from liability for breaching his or her duties without getting advice from Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

When dealing with others on your behalf, your agent should always disclose that (s)he is acting for you and not for him or herself. This prevents your agent being personably liable for the debt or action. When signing documents, your agent should write or print your name, then sign his or her name and disclose that (s)he is signing as your agent. For example: “John Smith, by Sally Smith, his Agent” or "Sally Smith, signing as agent for John Smith." If you are unsure how something should be signed, contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Unless your power of attorney provides otherwise, your agent is not required to account for his or her activities unless the information is:

• Requested by you;

• Ordered by a judge;

• Requested by your guardian, conservator or another of your fiduciaries (such as a co-agent);

• Requested by a government agency with authority to protect your welfare; or,

• Requested by your executor, personal representative or successor to your estate after your death.

In those situations, your agent must provide the information within 30 days, or if your agent documents in writing why (s)he needs additional time, within 60 days. If you are an agent who has been asked to account for your activities, or you want an accounting from your agent, contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Your agent must immediately stop acting for you as soon as (s)he knows that your power of attorney has been terminated or revoked. If they do not, immediately contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Because an agent may be liable for violating a power of attorney, his/her fiduciary duties, or the law regarding powers of attorney, anyone asked to be an agent under a power of attorney should consult with Thomas T. Tornow, P.C. at http://www.tornowlaw.com about his or her important responsibilities and duties.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

This post is exclusively for informational purposes. It is not legal advice. Viewing this post, using information from it, or communicating through this blog does not create an attorney-client relationship. Thomas T. Tornow, P.C. is not liable for the use or interpretation of information on this blog and expressly disclaims all liability for any actions you may or may not take based on the content of this blog.

Saturday, April 28, 2012

Can I Change or Terminate my Power of Attorney?

Can I Change or Terminate my Power of Attorney?

Yes. You can change or terminate (also called revoke) your power of attorney at any time, for any reason, or for no reason at all. For example, you can change your agent or his or her authority. Revoking your power of attorney terminates your agent’s authority.

Changes to your power of attorney require either a new power of attorney or an amendment to your existing power of attorney. The new power of attorney or the amendment must be executed the same way as described in the earlier post “How Do I Give a Power of Attorney.”

Terminating or revoking your power of attorney is usually done by you giving written notice to your agent that your power of attorney is revoked; or by making a new power of attorney that specifically says it revokes your prior power of attorney. There are other events that could terminate your power of attorney. These are discussed in detail in a later post titled “When does my Power of Attorney Stop?”

You should immediately notify your agent of any change or termination of your power of attorney. Until then, your agent can bind you unless the person or business dealing with your agent has actual knowledge of the change or termination or is acting in bad faith.

Contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com if you want to change or revoke your power of attorney, or if you are an agent who thinks your authority may have been changed or revoked.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

Can I Have More than One Agent or Power of Attorney?

Can I Have More than One Agent or Power of Attorney?

Yes, you can have more than one agent. This can result from your power of attorney naming more than one agent or you giving more than one power of attorney. For example, you might want to appoint an agent with financial experience to make business decisions for you; and a different agent with medical knowledge to make health care decisions for you. If you have more than one agent, they are called co-agents.

Unless your power of attorney says otherwise, your co-agents can act independently for you without the knowledge or consent of the other co-agents.

Your co-agents can have completely different authority, the exact same authority or authority that is not identical, but overlaps. Before you give your co-agents identical or overlapping authority, you should consider the consequences if your co-agents disagree. Avoid the temptation to require your co-agents to agree on all matters. Instead, provide a clear method in the power of attorney for how such disagreements will be resolved. For example, if you make more than one child your co-agent to make home care decisions for you, you should provide for how that decision will be made if they disagree. Otherwise, the disagreement may generate a family feud and law suits. For advice on how to resolve disagreements between co-agents, contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

Who Should be My Agent in My Power of Attorney?

Who Should be My Agent in My Power of Attorney?

Only you can decide who should be your agent. Your agent does not need to be a relative.

Although the Uniform Power of Attorney Act says “anyone” can be an agent, it is questionable whether someone under 18 years old, or incompetent to enter into a contract, could be an agent under a power of attorney. It would certainly be unwise for you to appoint such a person.

An act performed by your agent under your power of attorney binds you the same as if you performed the act yourself. So it is important that your agent be someone you trust to act honestly, carry out your wishes, and act only in your best interest. It is advisable that your agent know about finances in general and your specific finances and affairs. You might want to appoint one agent for business decisions and a different agent for your health care decisions. Contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com for a power of attorney or change your agent.

You cannot appoint someone as your agent without their consent. It is important to ask the person whether (s)he is willing to be your agent under your power of attorney. Because your agent is liable if (s)he violates the power of attorney, his/her fiduciary duties, or the law regarding powers of attorney, the person you ask to be your agent should contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com to discuss the important responsibilities and duties (s)he is undertaking.

Although not required, your power of attorney should name one or more people (called a successor agent) who will take over your agent’s duties if your agent resigns, dies, becomes incapacitated, is not qualified or declines to be an agent. Alternatively, your power of attorney can name a person to appoint your successor agent(s) for you.

Your power of attorney can also name who you want as your guardian or conservator should that become necessary. It can be your agent or someone else. A judge is required to honor your choice unless there is good reason to the contrary, or the person you named is not legally qualified to be a guardian or conservator.

The person agrees to be your agent or successor agent by any statement or conduct indicating acceptance, including exercising authority or performing duties as your agent under your power of attorney.

If you want to appoint or change your agent, successor agent, guardian or conservator, contact Thomas T. Tornow, P. C. at http://www.tornowlaw.com. If you have been asked to be an agent, successor agent, guardian or conservator, contact Thomas T. Tornow, P. C. at http://www.tornowlaw.com to learn your responsibilities if you accept.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

How Do I Give Someone a Power of Attorney?

How Do I Give Someone a Power of Attorney?

To give a power of attorney, you must be over 18 years old and competent to enter into a contract. You are competent to enter into a contract unless you are of unsound mind or have been deprived of your civil rights.

Your power of attorney must be in writing. It must identify your agent(s). It must either be signed by you or by another person who signs your name at your direction, in your presence, when you are conscious. It is advisable, but not required, that your signature be notarized.

You can give more than one power of attorney. Giving more than one power of attorney does not automatically terminate a prior power of attorney. However, powers of attorney often contain a clause saying that you are revoking or terminating all other powers of attorney. If you want to have more than one power of attorney in effect at the same time, you need to make sure that none of them have that clause.

Your powers of attorney may be for different subjects. You may want to give one agent a power of attorney for health care decisions and another agent a power of attorney for financial matters.

You can also give more than one power of attorney to different agents for the same subject; or give one power of attorney that names more than one agent. These are called co-agents. A co-agent is different than a successor agent (discussed in a later post). Co-agents are authorized to act for you during the same time period. A successor agent is authorized to act for you only if your former agent can no longer act for you.

Unless your power of attorney specifies otherwise, the agent named in each power of attorney, or co-agents named in the same power of attorney, can act independently for you without the knowledge or consent of the other agent(s) or co-agents.

If your agents or co-agents have overlapping authority, you should consider the consequences if they agents disagree and provide a clear method in the power of attorney for how such disagreements will be resolved. For example, if you give each of your children a power of attorney, or name more than one child as co-agents, to make home care decisions for you, you should provide for how that decision will be made if the children disagree. Otherwise, the disagreement may generate a family feud and law suits for resolving disagreements between co-agents.

If you need a power of attorney or want your power of attorney updated, contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

Do I Need a Durable Power of Attorney if I Have a Trust?

Do I Need a Durable Power of Attorney if I Have a Trust?

Yes, you should have a durable power of attorney even if you have a trust, including a living trust. People often forget to transfer some of their assets into the trust or acquire assets in their own name after the trust is established. If you have a properly prepared durable power of attorney, your agent may be able to transfer those assets into your trust if you are not able to do so due to illness or incapacity. This could avoid probating your estate. The power of attorney can also allow your agent to handle transactions for you that are not covered by the trust documents, such as filing tax returns and contracting for your medical and home care. Contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com to get a durable power of attorney or to make sure your power of attorney will work with your trust.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow

Do I Need a Durable Power of Attorney if I Have a Will?

Do I Need a Durable Power of Attorney if I Have a Will?

Yes, you should have a durable power of attorney even if you have a Will. A Will takes effect only when you die. Your power of attorney allows your agent to handle matters when you are alive. With current medical technology, there can be a very long period of time between when you may not be able to handle your affairs and when your Will takes effect. Having a durable power of attorney allows your agent to handle your affairs during this period, probably without a conservator or guardian. To get a durable power of attorney or to make sure your power of attorney is durable, contact Thomas T. Tornow, P.C. at http://www.tornowlaw.com.

Thomas T. Tornow, P.C.

By: Thomas T. Tornow