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 or financial. 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 (often called an Advanced Health Care Directive). 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.
Whether one or more are entrusted with power of attorney, communication and transparency are the key factors in avoiding painful situations in the family.
You can also name an independent agent. This may provide more flexibility to help the parent manage his or her affairs.
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.
Reference: Considerable (July 10, 2019) “How to assign power of attorney without sparking a family feud”