We highly recommend that individuals complete a Durable Power of Attorney for Financial Matters (or a POA for short). This important document is priceless in the unfortunate event of incapacity and is relatively painless to put in place. Despite its usefulness, many are still wary or ill-informed about the POA. Here are four of the most common myths we hear about POAs:
Myth #1: If I execute a power of attorney, my agent could steal all my money.
A power of attorney does not allow your agent unfettered power to make financial decisions on your behalf. Your agent has a fiduciary responsibility to you. They are legally bound to make all decisions at your direction or in your best interests (and those decisions are limited by the specific powers included in the power of attorney). A new bill passed this year in Georgia that further strengthens this fiduciary responsibility and provides for stiff penalties for those that violate it.
Myth #2: I don’t need a POA—I’m married and my spouse can take care of all that for me.
There is no natural power of attorney relationship between spouses or a next of kin law for financial matters. So, being married does not allow your spouse to gain access to any of your assets or accounts. Only accounts that are jointly owned or assets that are titled jointly with your spouse will give him/her the ability to access those accounts or assets without your permission. Also, some jointly owned assets, such as real estate, require both signatures to sign a deed. If one spouse is incapacitated and cannot sign the deed, having a power of attorney in place can allow the other spouse to sign on behalf of the incapacitated spouse.
Myth #3: I should name all my children as co-agents to avoid conflict.
Many of our clients are afraid of hurting the feelings of their adult children, so they think they want to make all of the children co-agents on the POA. This situation can actually cause so much more headache. Having co-agents requires that all agents be available, present and agreeable to any decisions or actions before anything can be done. In the event the children do not agree on a decision, they delay necessary and time-sensitive actions from being taken. When just one person is named as the agent, decisions and actions can be taken in a timely manner. It has also been our experience that very few adult children are offended by not being their parents’ agents—they are often relieved to not have the responsibility and hassle.
Myth #4: My financial agent could be held personally responsible for my bills.
The financial agent is not personally responsible for your debts or bills. They could only not be held liable if those debts resulted from dishonest or grossly irresponsible acts on their part. In actuality, there is little legal risk for an agent who acts with honesty and transparency on your behalf.
As always, be sure to contact an experienced attorney with any questions you may have about a Power of Attorney for yourself. You can reach our office for a complimentary phone consultation at (404)843-0121 or firstname.lastname@example.org.