A few months back our blog began discussing how powers of attorney, which allow a person to vest a trusted individual with the authority to act on their behalf, are a truly vital component of any comprehensive estate plan.
Indeed, our previous post examined some of the requirements for executing a power of attorney here in Utah, and the people whom the principal -- the person executing the document -- can appoint to serve as their agent. We'll continue our examination in today's post.
What are the fiduciary duties of the agent?
In general, the person appointed to serve as the agent in a power of attorney document is assigned fiduciary duties, meaning he or she has an ongoing duty to provide the utmost care in all matters related to this role.
Indeed, agents are required to do the following:
- Honor the wishes of the principal and act only in their best interests
- Never forget that assets belong to the principal and manage them with the necessary prudence
- Keep the principal's funds separate
- Maintain complete records of all financial transactions
- Include the principal in the decision-making process as much as possible
- Comply with the terms set forth in the power of attorney and act within the granted scope of authority
What authority does a power of attorney confer regarding health care?
Unless the power of attorney document expressly declares otherwise, an agent is granted the authority under the federal Health Insurance Portability and Accountability Act (i.e., HIPAA) to access the private health care information of the principal, and confer with his or her medical providers.
They are not granted the authority, however, to make medical decisions on behalf of the principal. Such authority must be conveyed via another legal document known as a health care directive.
When does a power of attorney take effect?
A power of attorney generally takes effect upon its signing by the principal. However, the document can dictate that it becomes effective on a certain future date or upon a certain event, such as the principal's treating physician declaring them incapacitated.
We'll conclude this important discussion in a future post, discussing the circumstances under which a power of attorney can be changed, revoked or terminated.
If you would like to learn more about executing a power of attorney or creating a comprehensive estate plan, consider speaking with a skilled legal professional.