Pros and Cons of having more than one Agent under a Financial Power of Attorney
Individuals planning for incapacity seek out people they trust to handle their affairs when they are unable. This can be done by naming an agent under a statutory durable power of attorney which is also referred to as a financial power of attorney. Usually, these people chosen to act as agents for the incapacitated individuals are family members or close friends. The agent may also be experienced in handling financial matters. These are both good characteristics to look for in an agent. In some cases, an individual planning for incapacity may believe that naming two or more agents works best. That may be true, but the individual should weigh the pros and cons of such a decision.
Pros of Naming More Than One Agent under a Financial Power of Attorney
1. If one agent is located out of town, the second agent located in town would be able to meet personally, with real estate agents, bankers, financial planners, etc.
2. If an individual owns different kinds of assets – real estate and artwork for example, it could make sense for the individual to name agents to specifically handle those assets. However the financial power of attorney would need to be carefully crafted to limit each agent’s scope.
3. Splitting duties – two hands are better than one theory.
Cons of Naming More Than One Agent under a Financial Power of Attorney
1. Disputes – if the agents cannot agree – for example how best to spend assets to cover the cost of long term care– you could find yourself in court to resolve the differences.
2. Third parties may not accept the agent’s authority – financial institutions are especially wary of fraud and if two different people came into their location with the same authority it would set off red flags for them.
3. Increased likelihood of abuse – the power of attorney can grant broad powers to the agent. If either agent find themselves in financial problems, they could be enticed to help themselves to the incapacitated individual’s money. This risk adds to the growing list of financial abuse risk, especially for seniors.
4. Logistics – if two agents are named on the same financial power of attorney, any decision would require both of their approval. This creates an added burden to getting things done for the incapacitated individual.
5. Family dynamics – often a parent will want to be fair amongst their children. This feeling carried through adulthood and the parent may wish to give each child equal rights so not as to hurt ones feelings. This emotional decision should be avoided when it comes to naming a financial agent.
Generally, naming more than one agent under a financial power of attorney should be avoided. Only in specific circumstance and under limited authority should more than one agent be named under a financial power of attorney. If you are considering naming more than one agent under a financial power of attorney speak to your attorney to understand how it may affect your specific situation.