When you make a power of attorney you will select an agent, also called an attorney-in-fact who will represent your interests or make decisions on your behalf. Through the power of attorney document you create you will grant your attorney significant legal authority to make decisions for you. Because of this, you must approach the question of agent selection very carefully.
Though you may have an idea of who you would like to serve as your attorney-in-fact, it’s always a good idea to carefully evaluate your choices before you make a final selection. Further, if you’ve already made a power of attorney and selected an agent, you should periodically review your selection to determine if that agent is your best option.
A power of attorney creates what is known as a principal–agent relationship. A principal is someone who creates a power of attorney, while the agent, or attorney-in-fact, is the person or organization the principal appoints to represent his or her interests.
Because the power of attorney gives the agent significant legal authority, that agent will also have to act with a heightened sense of responsibility. An agent has a legal responsibility to do what is in the principal’s best interests. Failing to do so can lead to the agent becoming personally liable for any of his or her actions when representing the principal.
The right agent is the one who can handle these additional powers and responsibilities. Your agent should be someone you can trust, and someone you believe can manage his or her duties responsibly.
Many powers of attorney will require your attorney-in-fact to act on your behalf in relation to third parties. These third parties can be almost anyone with whom you have dealings, such as your bank, financial institutions, business associates, or your doctors. The agent you choose to represent you will need to be able to readily communicate and interact with those third parties. If your attorney-in-fact is too far removed from the third parties, it could make it much harder for the agent to carry out his or her responsibilities. Choosing agent located close to you, and close to the third parties, is always better than someone who is located far away.
Some powers of attorney will grant your agent decision-making authority only after you become incapacitated. This might not happen for a very long time, and you will want to appoint an attorney-in-fact who will be capable of acting should that time ever arrive. Choosing an agent who was young enough to be capable of acting should you become incapacitated years, or even decades, in the future is something you will need to think about.