Often when a parent or loved one loses capacity, someone in the family takes control over the incapacitated person’s financial or medical decisions. When the incapacitated person has done proper estate planning in advance, the person who takes over is named in the estate planning documents, such as a Financial Power of Attorney, Trust, or Advance Health Care Directive. When proper estate planning has not been done, the person taking over is often surprised to find that he or she does not have any real, non-emergency authority to act without action by the court in a Conservatorship (guardianship) proceeding.
However, being named as a Power of Attorney, Agent, or Conservator is not the end of the story. Clients frequently begin their legal questions with, “Well, I’m Power of Attorney so…” and continue with whatever action they propose to take, whether it is to sell some real property, change the incapacitated person’s residence, or authorize a particular type of treatment. Stop right there! Understanding the role of the decision-maker in these circumstances is crucial before taking any action.
All of these positions are “fiduciary” relationships, meaning the named person must act in the best interest of the incapacitated person at all times and even above his or her own self-interest. Although as an agent, the fiduciary is allowed to “step into the shoes” of the incapacitated person to make decisions, those decisions must align with the incapacitated person’s known preferences and beliefs, unless there is some compelling reason to act otherwise.
Financial Powers of Attorney, Conservators of the Estate, and Successor Trustees all serve similar functions: they take control over the financial decisions within their realm. In the case of Successor Trustees, only trust assets can be controlled. For Financial Powers of Attorney and Conservators of the Estate, only finances outside the trust may be controlled. In all cases, the document(s) granting the authority to act may contain a number of limitations about which you should familiarize yourself. It is possible that the document limits the fiduciary’s power to make certain investments or sell certain property. In such cases, the fiduciary may need to request court permission to act or find another way to accomplish their goal.
Similarly, Advance Health Care Directives and Conservatorship over the Person grant the authority to make medical decisions. The Health Care Agent is not totally bound by the document, but is put on notice within the document of the incapacitated person’s preferences. For example, if the incapacitated person is a member of a religious group that believes in certain treatments, such as faith healing, or objects to treatments, such as blood transfusions, then the agent will have to justify any contrary health care decisions to the incapacitated person, if he or she regains capacity, or to the family members. The Agent’s personal beliefs are not grounds for approving or denying certain treatments.
If you have been named as an agent for another person, your rights, responsibilities, and obligations are complicated areas of the law. Familiarizing yourself with the documents is the first step toward ensuring that you are acting appropriately and protecting yourself from future liability. You should consult with an attorney immediately to clarify any parts that you do not understand and before taking any major actions.
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