A successful agent for an elder takes the right action with the right document at the right time.
Get one of those 3 rights wrong, and you’re looking at failure, civil liability or even jail time.
The right action is the easiest part. The key is remembering that you are just an agent. You are required to act as the principal (the elder) would want you to act, and always, always in the principal’s best interests. Your wishes do not supersede those of your principal. The principal has not surrendered any rights to you and does not need your permission for anything. The principal can fire you at any time without a reason. The principal owes you nothing. You, however, owe the principal the highest fiduciary duty and your undivided loyalty.
If that seems unfair to you, then you have no business serving as an agent.
Now let’s talk about the right document at the right time.
These documents are effective only during the principal’s lifetime: Durable (Financial) Power of Attorney, Medical Power of Attorney, Directive to Physicians, Designation of Guardian, Living Trust. These documents are effective only after the principal’s death: Designation of Burial Agent and Will.
The Durable Power of Attorney gives you authority to handle the principal’s financial affairs. The scope of your power is set out in the document. The document may be “springing,” meaning that you have power only if the principal is incapacitated, or “presently effective,” meaning that you have power regardless of whether the principal has capacity.
A Medical Power of Attorney gives you authority to make medical decisions for the principal only when the principal is incapacitated.
A Directive to Physicians is the principal’s instruction to you, as an agent under the Medical Power of Attorney, and to the health care professionals for when life-sustaining procedures (such as a feeding tube) should be used.
A Designation of Guardian is the principal’s instruction to the Court regarding who the principal wants appointed as a guardian of the estate or person should one become necessary. Incidentally, the Court is not bound by the principal’s instruction, so if you want to be the guardian you will still have to earn the position. The principal also gets to tell the Court who should not serve as guardian, and the Court is bound by that instruction.
A Living Trust is a document agreement where the principal names an agent, known as a trustee, and sets forth instructions regarding handling of certain assets. This document is the only one of the 5 that may survive the death of the principal. The trustee has a duty to all of the beneficiaries named in the document, and not just to the principal.
The Designation of Burial Agent dictates final disposition of the principal’s body.
The Will provides for disposition of the principal’s assets and debts after death. It requires Court action to be effective.
Just remember 3 rights and no wrongs, and it will all work out splendidly.
Virginia, a 1982 SMU law school graduate, has advised clients for over 35 years. For more information, visit hammerle.com, and for newsletter sign-up, email email@example.com. This column does not constitute legal advice.