In this guide
Understand the Role of an Agent
An agent (also called an attorney-in-fact) has legal authority to act on your behalf in financial or medical matters, depending on the type of POA you create. For a financial POA, they might manage bank accounts, pay bills, or sell property. For a medical POA, they make healthcare decisions if you're incapacitated.
This role carries immense responsibility and requires trustworthiness, good judgment, and the ability to follow your instructions. The agent must act in your best interest, avoid conflicts of interest, and keep accurate records.
Before choosing someone, consider whether they can handle the pressure and complexity of the tasks. Not everyone is suited for this role, even if they are well-meaning.
- Financial POA: managing money, filing taxes, dealing with insurance
- Medical POA: consenting to treatment, choosing care facilities, end-of-life decisions
- Durable POA: remains effective if you become incapacitated
- Springing POA: only takes effect upon a specified event (e.g., your incapacity)
Identify Your Needs and Desired Qualities
First, list the specific tasks your agent will handle. If you own a business or have complex investments, you need someone with financial savvy. If you have strong healthcare preferences, you need someone who will advocate for them.
Key qualities to look for: integrity, reliability, and emotional stability. The person should be organized, able to communicate clearly, and willing to make tough decisions under stress.
Consider their proximity to you. If they live far away, they may struggle to handle day-to-day matters. Also, think about their age and health—you want someone likely to outlive you and be available when needed.
- Financial literacy: comfortable with budgeting, taxes, and investments
- Availability: has time and energy to manage your affairs
- Communication skills: can discuss sensitive issues with family and professionals
- Respect for your wishes: willing to follow your instructions, even if they disagree
- Conflict resolution: able to handle disputes among family members
Evaluate Potential Candidates
Start with close family or friends, but don't automatically choose a spouse or adult child. Consider their current life circumstances—if they are dealing with their own financial problems or health issues, they may not be the best fit.
Have an honest conversation with each candidate. Explain the responsibilities and ask if they are willing and able to take on the role. Discuss your values, your financial situation, and your healthcare wishes to gauge their understanding and commitment.
Ask them how they would handle hypothetical scenarios, like a family member pressuring them for money or a doctor recommending a treatment you oppose. Their answers will reveal their judgment and loyalty.
- Ask about their experience with financial or medical matters
- Discuss their own time constraints and other commitments
- Test their decision-making with 'what if' questions
- Observe how they handle stress and conflict
- Check if they are trustworthy with sensitive information
Consider Professional Agents
If you don't have a suitable family member or friend, consider hiring a professional, such as an attorney, accountant, or trust company. They have expertise and are held to professional standards, but they charge fees.
Professional agents may be less emotionally involved, which can be an advantage in family disputes. However, they may not know you personally, so you'll need to document your wishes clearly.
Before hiring, check their credentials and reputation. Ask about their fee structure and how they handle conflicts. Also, ensure they are bonded or insured, if applicable.
- Attorneys: can handle legal and financial matters, but may be costly
- Accountants: good for tax and financial management
- Trust companies: offer institutional management, but may have minimum asset requirements
- Fiduciary services: independent professionals who act as conservators or guardians
Plan for Contingencies and Succession
You should name at least one successor agent in case your first choice is unable or unwilling to serve. This is especially important if your primary agent becomes ill or passes away.
In your POA document, you can specify conditions for replacement, such as if the agent resigns, is removed by a court, or becomes incapacitated. You can also state that if the agent acts against your wishes, they are automatically replaced.
Review your choice periodically. Life changes—divorce, moving away, or a falling out—can affect your decision. Update your POA as needed to ensure your agent remains the best person for the job.
- Name 2-3 successors in order of preference
- Specify how to determine incapacity of the agent
- Include a clause allowing you to revoke or change the agent
- Review your POA every few years or after major life events
Document Your Wishes and Communicate
Once you've chosen an agent, have a detailed conversation about your expectations. For a medical POA, discuss your values regarding life support, pain management, and quality of life. For a financial POA, explain your budget priorities and any assets you want protected.
Put your wishes in writing, either in the POA document itself or in a separate letter of instruction. This reduces ambiguity and provides a reference for your agent.
Inform your family members and other advisors about your choice to prevent confusion or disputes later. Share a copy of the POA with your agent, a trusted family member, and your attorney or financial planner.
- Create a letter of instruction with contact info and key documents
- Record a video or audio message explaining your wishes
- Provide your agent with a list of accounts, policies, and professionals
- Keep your POA in a safe place, but make sure your agent knows where it is