Important Conversations–Who Will Manage Your Affairs if You Become Disabled?

By R. Kurtz “Kurt” Holloway

Who will manage your affairs if you become temporarily or permanently disabled? With a power of attorney, you (the principal) can appoint another (your agent) to handle your legal and financial affairs, if necessary.

Deciding what authority to give to your agent is very important. To understand your options you should speak with an attorney.

Equally important is the person you choose as your agent.  Many people automatically choose close family members for this job. But you and your potential agent should be aware of the legal duties your agent will be accepting. The law in Pennsylvania sets out a number of legal duties of an agent. Some are mandatory and some are optional.

Generally, the mandatory duties require your agent to: follow your expectations, if known and, otherwise act in your best interest; act in good faith (honestly); and act only within the scope of authority granted in the power of attorney.

The optional duties would require your agent to: act loyally for your benefit; keep your funds separate from her own, except in certain circumstances; avoid any situation that creates a conflict between her interests and yours; act carefully; keep an accurate and complete record of all transactions made on your behalf; cooperate with others who have authority to make health care decisions for you; and follow your estate plan, if known. Some exceptions apply to this last duty depending on the circumstances.  You, the principal, can waive some or all of these optional duties in the power of attorney.

In addition to understanding the legal duties of an agent, your agent should know what your wishes are for handling your affairs. For example, consider these questions. Beyond paying for your necessities, what are the extras that are important to you? How important is it to you to preserve assets for your heirs versus spending for your care? How important is it that you stay in your home as long as possible, even if more of your money needs to be spent?

Once you have chosen a potential agent, ask the person if he is she is willing to take on the job. It can be a big job. Some people may not feel they have the time or capability.  Being an agent will be especially difficult for a person who does not live near you.

Having a conversation with someone about your needs if you become disabled is not easy. You need to take the lead. It will be harder for someone else to bring up your possible disability.

AARP has a good resource available for families for disability planning. It is called, Prepare to Care: A Planning Guide for Families. It is written for the future agent/caregiver but I recommend that anyone thinking of preparing a power of attorney read it. It will help with the important conversations you need to have. You can find it at:

(www.aarp.org/home-family/caregiving/info-07-2012/prepare-to-care-planning-guide.html)

In summary consider whether a person will follow the legal duties, your wishes and your estate plan. Then discuss these things with your choice for agent and be sure she is willing to serve. The conversation will help both of you.

Kurt Holloway

About the author
Kurt Holloway

R. Kurtz “Kurt" Holloway was admitted to practice in 1977 in Pennsylvania and later in the Eastern District Federal Court of Pennsylvania. Mr. Holloway’s areas of concentration are Estate Planning, Estate Administration, Elder and Disability Planning, Real Estate Law, Zoning and Land Development, Business Law and Municipal Law.

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