Throughout adulthood there may be times when someone is unable to act to complete financial transactions. Whether traveling overseas, stuck in quarentine, or recovering from surgery, its important that an alternate is appointed to act on your behalf. This is most commonly done by appointing an Agent through a Durable Financial Power of Attorney, but it’s often unclear what that role entails. This role can become complicated when an adult child is appointed Agent.
Forbes’s recent article entitled “Let’s Get Clear: What Does It Mean To Be Appointed Aging Parents’ Power Of Attorney?” provides the answers to two frequently asked questions.
Question: My father has been diagnosed with Dementia. Can he revoke his DPOA that he signed years ago and name an adult child to take over managing his money when he needs help?
Answer: Perhaps. Just because someone has been diagnosed with Alzheimer’s Disease or another form of Dementia, it doesn’t mean they lack the capacity needed to appoint an Agent under a Power of Attorney. If Dad has dementia, he needs to be evaluated to see if he still has the capacity to make financial decisions. This is a legal determination with help from doctors and particularly psychologists, who can perform the evaluation and give standardized test results. If the father is found to have financial capacity, he is permitted to revoke the durable power of attorney at any time. However, if he doesn’t have mental capacity, he’s no longer legally capable of revoking the document, or of signing a new one.
Question: If I’m the appointed Agent on the Power of Attorney, when can I use this authority?
Answer: Provided you’ve met any requirements detailed in a Durable Financial Power of Attorney, you can act immediately. It is wise to remember that you have a fiduciary responsibility to act in accordance with the Principal’s financial plans. Some Power of Attorney documents specify that their authority is “springing” meaning, they require one or two doctors to testify that the Principal lacks capacity before you can act. This presents additional burdens for the Agent.
Talk with an experienced Elder Law Estate Planning Attorney to ensure that your Powers of Attorney are drafted correctly for your needs. Most Elder Law Attorneys offer a consultation at no cost. Contact our office to schedule one today.
Reference: Forbes (June 22, 2021) “Let’s Get Clear: What Does It Mean To Be Appointed Aging Parents’ Power Of Attorney?”