Pros and Cons of having more than one Agent under a Financial Power of Attorney
Wondering whether you can name more than one individual as agent in your power of attorney (POA)? Worried you’ll make the wrong choice? This article contains all the information you need to make an informed decision about when shared agency is useful and how to use it properly.
Definition of agent or attorney-in-fact:
The “principal” is you, the individual who creates a power of attorney document.
The “agent” is the individual given the authority to act on your behalf by this legal document. In a durable (or financial) power of attorney, the agent has the power to work with financial accounts, properties, and other assets on behalf of the principal.
“Attorney-in-fact” is simply another term for an agent.
Find more information about power of attorney on our website.
So, can more than one person have power of attorney in Texas?
Yes, in Texas and elsewhere, two or more co-agents can share power of attorney. This is sometimes called dual power of attorney.
Pros of naming more than one agent in a durable power of attorney
1. Adding a second agent can add convenience.
A second agent can make it faster and easier to take care of financial and estate issues. For instance, if one agent is located outside of town, you may want a second agent located in town. This second agent will be able to meet personally with real estate agents, bankers, and financial planners.
2. A special power of attorney (a.k.a. limited power of attorney) can play up strengths, such as selling property.
If you own different kinds of assets—real estate and artwork for example—it might make sense to name separate agents who can specifically handle each of these assets.
However, if you go this route, the financial power of attorney document needs to be carefully crafted to limit each agent’s scope. This can be done by creating a special power of attorney with a limited scope specifically for that second agent.
3. Co-agency can allow siblings or other loved ones to split duties.
According to the “two heads are better than one” theory, two agents might be able to better problem-solve or manage your accounts than one agent working alone. Further, splitting the significant responsibility of acting as agent might make the role easier and less burdensome for each party.
Cons of naming more than one agent in a durable power of attorney
1. There is a danger of disputes among agents in a dual power of attorney.
Sometimes, agents cannot agree on how to handle financial matters. For example, sibling co-agents may disagree on how best to spend assets to cover the cost of long term care for their parents. These kinds of family disputes over elderly parents and their finances can mean spending time in court to resolve the differences.
2. Multiple agents on a financial POA can trigger fraud concerns.
Third parties may not accept a co-agent’s authority. Financial institutions, in particular, are wary of fraud. If two different people come into a bank, for instance, with the same authority but with different instructions, it would set off the bank’s red flags—to the detriment of any estate planning or other business at hand.
3. When two people have power of attorney, it means an increased potential for financial elder abuse.
A power of attorney can grant broad powers to its agents. If either of these agents finds themselves in financial trouble, they could be tempted to help themselves to the principal’s money. Double the agents means double the risk. Abuse of power of attorney adds to a growing list of financial abuse risks targeting seniors.
4. Naming two or more power of attorney agents can create logistical problems.
If two agents are named on the same financial power of attorney and the document requires them to work jointly, any decision would require the approval and cooperation of both agents. This would create an added burden the agents and slow down time-sensitive financial tasks.
So, how many agents should you name on a durable power of attorney?
The answer is: It depends on your particular situation. But there are significant dangers to naming more than one power of attorney agent. Holman Law can help you decide if naming multiple agents is a wise choice.
FAQs on Selecting Power of Attorney Agents
Q: Can Two Siblings Have Power of Attorney?
Yes, two siblings can share power of attorney. Often, a parent who wants to be fair will give each child equal powers so not as to hurt anyone’s feelings. But remember that picking an agent isn’t picking favorites, and sometimes it would be better for the siblings (as well as for your estate) if you named only one, rather than two or three, agents.
Q: What’s the difference between joint agents versus concurrent agents in a POA?
While joint agents must agree on everything in order to act on behalf of the principal, concurrent agents each independently have the complete authority to act separately on any of the powers named in the power of attorney. There is often an “independent agent” clause that can be added to the POA form to ensure that concurrent agents may act independently of one another.
Q: Can I name an alternate agent in a power of attorney form?
An alternate agent is different than a co-agent. An alternate agent is someone who can step in if the primary agent named is unable or unwilling to fulfill their POA duties. There is usually an option to name an alternate agent in a power of attorney form, which you can fill out online or under the guidance of an attorney.
Q: How can I prevent abuse of power by a sibling named as agent (or by any agent)?
Abuse of Power and the Law
First, an agent owes a fiduciary responsibility to the principal, meaning they must act in the principal’s best interest according to law. The agent may be liable for any fraudulent or self-serving acts, and a court can remove an agent with sufficient evidence.
Using a Trust to Limit POA Abuse
Second, you can limit the assets and bank accounts managed by a sibling or adult child by placing some assets in a trust. It then becomes the job of a professional trustee to control valuable assets and accounts that are meant for other children or grandchildren.
Preventing Abuse of Company Assets
Finally, business owners can establish a business succession plan within their business entity (e.g., a corporation or limited liability company (LLC)). This serves to limit or prevent an agent from taking control of any business activities.
Q: How do you handle sibling disputes over a power of attorney?
A power of attorney may include wording about resolving disputes. If it doesn’t, and the dispute cannot be settled amicably, it may end up in court. Sometimes, the court will choose to revoke an agent’s authority. However, such court proceedings are often time-consuming and expensive. A “declaration of guardian” is a handy document to have in place ahead of timeIf in case this situation was ever to arise. Naming an estate guardian can reduce the effort and cost involved in a court proceeding.
Avoid any costly (and stressful) missteps when creating a shared power of attorney.
Allow us to help guide you through the power of attorney process.
Holman Law can help you create a power of attorney that matches your individual family context. We will ensure that your power of attorney is set up to act in the best interests of your family members. Contact us today to set up a consultation.
Steven C. Holman
Estate Planning and Elder Law Attorney
I love to spend time with my wife and three children and serving the Dallas Fort Worth community. I provide clients with a wealth of knowledge and experience navigating each individual’s Estate Planning needs including Trusts, Probate, Elder Care Law, and Long Term Care Planning. My law firm specializes in assisting clients with complicated legal forms and qualifying for the maximum Medicaid and Veteran (VA) benefits in Texas.