Even though Americans are living longer than ever before, they’re
dealing with age-related issues that many of our earlier generations didn’t
have to deal with because people didn’t live as long. Nowadays,
it’s common for people to live well into their 80s or 90s, but with
this advanced age, people often develop health issues that affect their
ability to make important financial decisions for themselves.
You may be worried that one day, you’ll get sick and you will not
be able to make important decisions about your bills, your savings accounts,
and your home. One way to put your mind at ease is to draft a Power of
Attorney, which will give your “agent” the power to make decisions
about your assets and property on your behalf.
A Power of Attorney is a legal document that gives another person the legal
authority to make decisions about your money and property if you cannot
make such decisions because you become injured or sick. Some states call
this a Durable Power of Attorney.
What is a Fiduciary?
If you designate someone else to manage your money and property for you
if you become incapable due to an injury, illness, or disease, this “agent”
will be a
fiduciary. Under Tennessee law, your agent or fiduciary is required to manage your
assets and property for your benefit, not for his or hers.
It doesn’t matter if the
fiduciary or agent manages a lot of money or just a little bit and it doesn’t
matter if the fiduciary is a close relative or a non-family member. When
someone agrees to be a fiduciary, he or she assumes legal responsibilities.
When someone acts as a fiduciary on your behalf, they have four basic duties:
- They must act in your best interests.
- They must be very careful about managing your money and property.
- They must keep your money and property separate from theirs.
- They must be very good at keeping records.
Whoever you choose to be your fiduciary, this person must be honest, trustworthy,
and they must act in good faith. If your agent (fiduciary) does not meet
these standards, he or she can be removed from their duties, sued, or
they may have to repay the money.
In Tennessee, it is possible that a dishonest agent is investigated by
the police or sheriff, and if they are found to be up to no good, they
can be arrested and face criminal charges. This is why it’s critical
for agents to remember they are not handling their own money!
If you create a Power of Attorney, you are the “principle”
and the person you designate to act on your behalf is called the “agent”
To learn more about adding a Power of Attorney to your estate planning
contact my firm at (888) 492-4735.