Always finish the job. In this case, the job is completing your estate planning documents. You might think that you are finished once you sign the documents.
You would be wrong. The final act is to talk to the agent you named about his or her duties under the documents.
Today, we will focus on your Durable Power of Attorney. In this document, you designated an agent to handle your financial affairs.
Why You Should Talk to Your Durable Power of Attorney Agent
Here is a sample script, based on a Texas Durable Power of Attorney. Tweak as necessary to describe the terms of your document.
Sample Script: Explaining Your Durable Power of Attorney
Introducing the Role
“Hi, Sam. Do you have time to talk? I just signed my Durable Power of Attorney, that’s a mouthful, so I will just call it my DPOA, and named you as my primary agent. My attorney suggested that I tell you a little bit about it.
Scope of Authority
“The document is about 5 pages long. It gives you very broad authority to handle my financial affairs. I described, by category, the types of transactions. My attorney says that the complete descriptions can be found in a Texas statute called the Texas Estates Code Durable Power of Attorney Act.
Estate Planning Powers
“I also gave you a few hot powers for estate planning, including the power to create a living trust. You still have a duty to preserve my estate plan, so these powers are just to make sure my plan is carried out. But there were a few available powers that I did not give you, such as the power to change beneficiary designations on my accounts. Of course, you don’t have the authority to do anything that is not described in the document.
When the DPOA Takes Effect
“After talking to my attorney, I decided to make my DPOA immediately effective. That means you could act under it now. I don’t need you to do anything now, but you have the authority to act until I die, revoke the DPOA, or a court suspends or revokes it.
Fiduciary Duties and Responsibilities
“There are some things you need to know about your responsibilities. Once you take your first action under my DPOA, you become what’s known as a fiduciary. That means you must act in good faith and act loyally for my benefit. You can’t put your interests above mine. But of course, I would not have named you as my agent unless I was confident that you would be fair.
Disclosure Requirements
“Every time you act under my DPOA, you must disclose that you are acting as my agent. That goes for telling people verbally and for writing it down. You should have a copy of my DPOA handy to show people to prove that you are my agent and have the authority to act.
Recordkeeping Obligations
“You should also keep good records for every action you take and decision that you make as my agent. That means keeping receipts and checks, and an inventory and documentation of my property. My attorney suggested that you keep everything on an accounting software or spreadsheet, but make sure you back it up!
What Happens If a Third Party Refuses the DPOA
“You may run into someone who will not accept my DPOA. In most cases, they have 10 days to accept it or tell you why they won’t accept it, and they must have a good reason under the statute if they refuse it.
Closing the Conversation
“I know being my agent is a big job, and I really appreciate you agreeing to serve!”
Hammerle Morris Is Here to Help You Finish the Job
Naming an agent under a Durable Power of Attorney is an important step, but the process does not end with signing the document. Taking the time to explain your intentions and your agent’s responsibilities helps ensure your financial affairs are handled as you intend if the need arises.
At Hammerle Morris Law Firm, we help clients create estate plans that work in real-life situations, not just on paper. Schedule a consultation to protect your intentions and your peace of mind.
Virginia Hammerle is an accredited estate planner and represents clients in estate planning, probate, guardianship, and contested litigation. She may be reached at legaltalktexas@hammerle.com. This blog contains general information only and does not constitute legal advice.
