In many families, it’s easier to figure out the ‘who gets what’ part of an estate plan than it is to decide which person should be power of attorney. Which adult child can handle finances, which one is better with decisions during a crisis?
Making the decision about which family member will take on the responsibility of power of attorney may be a little easier, if you have a clear understanding of what the role entails. Your estate planning attorney has seen every possible family dynamic and will be able to help you work through this decision.
Considerable’s recent article, “How to assign power of attorney without sparking a family feud,” gives us some idea how the power of attorney can work within a family and among siblings.
A power of attorney or POA is a legal document that allows one person to act on behalf of another, usually when that person is unable to make decisions for themselves for reasons of ill health.
Many people confuse a power of attorney role with the executor of the estate. Power of attorney authority is only in effect, while the person who has granted the authority is alive. Once that person dies, the executor of the estate then assumes responsibility of seeing the estate through the probate process. They’re two very different roles, but they can be held by the same person.
There are also different types of power of attorney. The most frequently used are the general power of attorney and the medical power of attorney. The general power of attorney is for management of financial, business, or private affairs. If a parent grants power of attorney to one of their children, he or she has the sole authority to act on behalf of the parent.
The other siblings have to abide by the inherent authority of the sibling with the power of attorney, to make decisions for the parent related to their business affairs.
It’s also important to understand that the power of attorney is a fiduciary obligation. This means the person who holds it must act in the best interests of the parent rather than their own. He or she must also comply with rules. Nonetheless, things can get sticky if there isn’t proper confidence among siblings or transparency, when major decisions are being made.
There’s also the option of signing a joint power of attorney, so that two siblings share the responsibility. This may decrease the potential for jealousy and mistrust within the family. However, it can also lengthen and complicate decision-making. There’s the possibility that the siblings simply can’t agree on an issue. As a result, an important decision remains stuck in neutral indefinitely.
If there’s no way you can select one person or even two people without the family coming unhinged, there is also the option to name an independent agent. This may allow the parents to create an estate plan without bringing up old family wounds or creating new ones.
Reference: Considerable (July 10, 2019) “How to assign power of attorney without sparking a family feud”