When a client becomes incompetent the person named as the “attorney-in-fact” in the Power of Attorney form must step in and assist with all components of the client’s financial life.
An attorney-in-fact handles all money matters – paying bills, investing assets, ensuring safekeeping of valuables while maintaining detailed and accurate records of all transactions. The attorney-in-fact is the incompetent person’s fiduciary. What this means is that the attorney in fact owes a higher duty of care to the person that they are now assisting. The fiduciary must act reasonably and carefully. As carefully as if they were handling their own money and affairs, but more so.
I have had the privilege of serving as attorney-in-fact for many of my clients who do not have some else that they can trust. I have managed the day-to-day issues that normally arise in a person’s life such as canceling newspaper subscriptions, changing telephone service, purchasing necessary personal items and clothing. I have also overseen the sale of homes and cars, purchased furniture, planned funerals, coordinated investments with financial advisors, reconciled tax issues with the IRS, and assisted police and insurance companies with break-ins and thefts of personal items.
The attorney-in-fact is many things to the person in need – money manager, confidant, and trusted advisor. It can be an overwhelming task, particularly if the newly incompetent person did not maintain his or her affairs in an orderly manner. However, with patience and persistence, an attorney-in-fact can take charge and maintain the incompetent person’s affairs in a satisfactory manner. If there is not a clear plan in place regarding the financial affairs, we look for clues. We check the mail each day and look through the home for important papers. If the person handled their financial affairs exclusively online – this can be a much greater challenge. And always involves several trips to the bank for assistance from the staff to check the automatic payments and deposits.
When selecting an attorney-in-fact not only should you tell the person you have selected, you should also spend an afternoon bringing them up to date on your financial affairs so that you have truly planned for potential but not inevitable incompetency.