FAQs — Agent Under Power of Attorney

My father designated me as his agent under his Power of Attorney. I have not yet acted as his agent but anticipate having to do so soon in light of his deteriorating health. What is required before I act as his agent?

Before you begin to act as an agent under a Power of Attorney (sometimes referred to as an "Attorney-in-Fact"), you must determine the scope of your rights and responsibilities. Carefully review the Power of Attorney form that specifies the rights and powers that are granted to you. They can be limited or broad. The Power of Attorney will also specify whether it is effective now or whether the Power of Attorney becomes effective at a later time upon the occurrence of a specified contingency, such as the incapacity or disability of the principal. These are gene rally called "Springing" Powers of Attorney. If it is a "springing" power, you must determine what, if anything, you need to do in order to establish that the contingency of incapacity or disability has occurrred, such as a letter or other writing from one or more physicians. You also must determine if your Power of Attorney is "Durable" – and remains effective upon the Principal's disability or incompetence – or "Non-Durable" – becoming ineffective on the Principal's disability or incompetence (it is unlikely that the Power of Attorney would be both Springing and Non-Durable).

You should also consult with the financial institutions that have accounts for the Principal to communicate to them that you are your father's agent, and to prevent the bank from interfering with or obstructing your use of the Power of Attorney at that institution. By law, banks are not permitted to refuse to acknowledge a Power of Attorney, and cannot insist that you produce one on their specific form. This practice has been further prohibited by a recently enacted law in New York State that became effective on September 1, 2009 and which imposes a greater penalty on banks that refuse to accept a Power of Attorney. As a practical matter, however, banks continue to pose obstacles to recognizing Powers of Attorney. Advance discussions with a local branch may avoid this inconvenience, especially if you may need to use the Power of Attorney in an emergency situation in the future.

You and your father should also spend some time reviewing his financial records and other important papers (such as his Will, deeds, etc.) so that you are familiar with the documents and have access to them.

An Attorney-in-Fact is a fiduciary. All fiduciaries have an obligation to act in accordance with the wishes of the Principal and in the best interests of the Principal, and not in their own best interests. A fiduciary is held to high standards of honesty, good faith, and is obligated to act with undivided loyalty to the principal. An agent / Attorney- in-Fact may not act for personal gain and must avoid "self-dealing" or "conflicts of interest." A fiduciary is accountable for his or her actions and may be held personally liable for discrepancies, improprieties or self-dealing, you should keep accurate and complete records of any transactions engaged in on behalf of your father pursuant to the Power of Attorney. This will help protect you if your actions are ever challenged in court.

If your father executed the Power of Attorney some time ago, you should ask his attorney to review it to see if it should be updated to reflect the current status of the law. If it should be updated, it is important to have the new Power of Attorney signed by your father as soon as possible – i.e., while he still has legal capacity. If it is later determined that your father lacks capacity to sign legal documents, then he will not be able to execute a new Power of Attorney.