Power of Attorney Basics

March 4, 2016

You have been appointed agent in an Arkansas power of attorney.  Now what?

First check the document.  Is the power limited?  Are you only allowed to handle a real estate deal?  health decisions?  Is the power broad?  You can only act with the power given to you in the document.  Any action which is not authorized is ineffective and could cause you personal liability.

You are a fiduciary.  As a fiduciary, you are bound to act in the best interests of the person who appointed you (for sake of ease, we will call that person "Bob").  Do not mix your money with Bob's money.  Do not spend Bob's money for your benefit.  You cannot pay your bills, buy yourself espresso, or invest in your brother-in-law's business.  You can pay Bob's bills, pay for a movie for Bob and you if Bob wants you to go, and invest Bob's money in an account in Bob's name.  The account should never ever be in your name. 

How do you act for Bob?  Whenever you need to sign something for Bob, you should sign "Bob Smith, by You Smith, POA."  If you are pressed for time you could sign "Bob Smith, by YS, POA."  Do not sign your name.  You could become personally liable for Bob's debt because you are acting individually and not as Bob's agent.

When can you act for Bob?  Again, check the document.  A power can be limited so that you cannot act until Bob cannot act for himself.  A power can allow you to help immediately.  Once appointed, you can usually act until removed or until Bob's death.  At Bob's death, your authority ends.  If you do something in good faith on Bob's behalf after his death and before you learn that he has died, it may still be effective.

CALL 501-984-5098

307B Carpenter Dam Road
Hot Springs, AR 71901

100 Plaza Carmona Place
Hot Springs Village, AR 71909