It’s important to realize that a Power of Attorney (POA) is a voluntary authorization that your parent has to have the legal mental capacity to create. Once it is created, your parent has the right to revoke it and may direct decisions until the point your parent loses capacity. The document can specify how that determination will be made, but if the parent later objects to the determination, the POA will likely not work.
State law requirements vary, but many states have a statutory form that can be downloaded and completed by checking boxes that stand for broad powers spelled out in state law. The document then has to be signed and notarized. It’s generally not a good idea to complete one of these standardized forms on your own because every POA should be tailored to the specific situation and needs of the principal and with an eye on reducing risk. A POA is like a blank check. Agents have little accountability unless the document is drafted to include some kind of monitoring or other safeguards.
An agent acting under a POA is considered a fiduciary under law, with very demanding obligations. Professional legal advice is advisable for POAs. The Consumer Financial Protection Bureau has a how-to resource for any family member serving as an agent, “Managing Someone Else’s Money: Help for Agents Under a Power of Attorney.”
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