Choosing someone to act under a power of attorney is an important part of estate planning. This person may be responsible for managing finances, paying bills, handling property matters, communicating with financial institutions, or taking care of other important responsibilities if you are unable to manage them yourself.
But circumstances can change. The person you originally selected may move away, experience health problems, become unavailable, decide they are no longer comfortable serving, or pass away before you. If that happens, who takes over?
This is an estate planning situation that can easily be overlooked. Fortunately, thoughtful planning can help ensure there is a clear path forward if your first choice is no longer available.
Understanding How a Power of Attorney Works
A power of attorney is a legal document that allows one person, commonly called the principal, to authorize another person, known as the agent, to act on the principal’s behalf.
The authority granted to an agent depends on how the document is written. An agent may have authority over banking, investments, real estate transactions, taxes, business matters, insurance, government benefits, and other financial responsibilities.
A durable document can generally remain effective even if the principal later becomes incapacitated, which is why it is such an important component of incapacity planning.
The person you select should be trustworthy, responsible, and capable of handling the responsibilities described in the document. However, even an excellent choice today may not necessarily be available years from now.
Why an Agent Might No Longer Be Able to Serve
There are many reasons an appointed agent might become unavailable.
Sometimes the change is practical. An adult child who lived nearby when the documents were prepared may eventually move across the country. A sibling may take on new family responsibilities that make serving difficult. A trusted friend may simply decide that the role is more than they can reasonably manage.
In other situations, the agent may develop health concerns or experience financial or personal circumstances that make continuing impractical.
The original agent could also pass away before the principal.
None of these situations necessarily means you made the wrong choice. Life simply changes, which is why estate planning documents should anticipate more than one possible scenario.
What Happens If Your Agent Steps Down?
An agent is generally not required to continue serving indefinitely. Someone who initially agreed to the responsibility may later determine that they are unable or unwilling to continue.
What happens next depends largely on how your power of attorney was drafted.
If the document names a successor agent, that individual may be able to step into the role according to the terms of the document. This creates a built-in backup plan without requiring family members to determine who should take responsibility.
Without a successor, the situation can become more complicated, particularly if the principal has already lost the ability to execute new legal documents.
That is one reason naming at least one backup can be an important part of comprehensive planning.
The Importance of Naming a Successor Agent
A successor agent is someone designated to serve if the first person named cannot or will not act.
Think of this person as the backup to your primary choice. The successor does not automatically share authority simply because they are listed in the document. Instead, they generally step in when the circumstances specified in the document allow them to do so.
Naming a successor in your power of attorney can provide continuity if your first choice becomes unavailable.
For example, someone might name a spouse as the primary agent and an adult child as the successor. Another person might select one adult child first and another as the backup. The appropriate choices depend on family relationships, capabilities, geography, and personal preferences.
The important point is to think beyond your first choice.
What If You Did Not Name a Successor?
If your original agent cannot serve and no successor was named, your options depend heavily on whether you still have legal capacity to make a new appointment.
If you are capable of making your own decisions, you can generally work with an attorney to update or replace the existing document and appoint someone else.
That process may be relatively straightforward.
The greater concern arises when the principal is already incapacitated. At that point, simply signing a replacement power of attorney may no longer be an option.
Without another authorized agent available, family members may need to consider other legal procedures to obtain authority to manage the person’s affairs. Depending on the circumstances, that could include a court proceeding involving guardianship.
Planning for a successor in advance can help reduce the likelihood of reaching that point.
What If Your Agent Dies Before You?
Estate plans can remain in place for many years, sometimes decades. During that time, the people named in them may experience major life changes of their own.
If your designated agent dies before you and your power of attorney names a successor, the document may already contain the solution.
If there is no successor, however, it is a good reason to update the document while you are still able to do so.
This is also why estate planning should not be treated as something you complete once and never revisit. Even if your own wishes have not changed, circumstances involving the people you selected may have.
What If You No Longer Want the Same Person Serving?
An agent does not have to become unavailable for you to reconsider your choice.
Relationships change. Families evolve. People move, get married or divorced, experience financial difficulties, or simply become less involved in one another’s lives.
You may also realize that someone you trust personally is not necessarily the best person to handle financial responsibilities.
If you still have the legal capacity to make changes, you can generally update your power of attorney to reflect your current preferences.
The key is not to wait until a crisis occurs to reconsider whether your selections still make sense.
Should You Name More Than One Backup?
For some individuals, naming more than one potential successor can provide additional flexibility.
Suppose you create estate planning documents at age 50 and name your spouse as your primary agent and an adult child as your successor. Decades later, both individuals could potentially be unavailable when assistance is actually needed.
Naming additional successors may provide another layer of preparation.
However, the appropriate structure depends on your individual circumstances. More names do not automatically make a document better. Each person should be carefully selected based on trust, responsibility, willingness to serve, and ability to carry out the role.
Should You Appoint Co-Agents?
Some people consider appointing two individuals to serve simultaneously rather than naming one primary agent and a successor.
There can be reasons someone might prefer this arrangement, but it also deserves careful consideration.
Requiring two people to participate in decisions may create additional oversight, but it can also make routine transactions more complicated. If agents disagree, live far apart, or have different approaches to financial matters, decision-making could become slower.
For many families, selecting one primary agent and one or more successors may provide a clearer structure. However, the appropriate arrangement should reflect the individual’s circumstances and the way the document is drafted.
Choosing the Right Successor
Choosing your backup deserves just as much thought as selecting your first agent.
Trust should be the starting point, but it is not the only consideration. Think about whether the person is organized, financially responsible, comfortable handling paperwork, and willing to communicate with professionals when necessary.
Geography can matter as well. Modern banking and electronic communication make it possible to handle many responsibilities remotely, but some matters may still be easier for someone who lives nearby.
You should also consider family dynamics. The person handling financial affairs may need to communicate with siblings, beneficiaries, accountants, attorneys, financial professionals, or care providers.
Your successor should be someone you believe can handle both the practical and interpersonal sides of the responsibility.
Talk to the People You Have Selected
Naming someone in a legal document does not necessarily mean that person understands what you expect from them.
A conversation can help.
You do not have to disclose every detail of your finances, but the people you select should generally know that you have appointed them and understand the basic responsibilities they may eventually assume.
Ask whether they are comfortable serving.
Someone may be honored that you trust them while still recognizing that they are not the right person for the responsibility. Learning that now gives you the opportunity to choose someone else rather than discovering the problem when the document needs to be used.
Review Your Documents After Major Life Changes
Certain events should prompt you to revisit your estate plan.
Marriage, divorce, the death of a spouse or family member, relocation, retirement, changes in family relationships, and significant financial changes can all affect whether your existing choices remain appropriate.
Your power of attorney should be included in those reviews.
Even when there has not been a major life event, periodically checking the document can be worthwhile. Ask yourself whether the people named are still appropriate, whether their contact information is current, and whether your succession plan still reflects your wishes.
A document that worked perfectly ten years ago may no longer be the best fit today.
Keep Your Broader Estate Plan Coordinated
Your financial agent is only one of several people who may have responsibilities under your estate plan.
You may also have an executor named in your will, a trustee responsible for a trust, and someone designated to make healthcare decisions.
These roles are different, even if you decide to appoint the same individual to more than one of them.
Reviewing your estate plan as a whole can help ensure that the people serving in different roles are appropriate and that your documents work together.
For example, if you replace an individual in one document because that person is no longer available, it may be worthwhile to check whether the same person is named elsewhere in your estate plan.
Don’t Wait Until the Document Is Needed
The easiest time to address a missing or outdated successor is while you are healthy and capable of making your own legal decisions.
If you discover today that your primary agent is no longer a good choice, you have an opportunity to update your documents thoughtfully. If the issue is discovered only after incapacity occurs, the available options may be much more limited.
This is one of the broader benefits of regular estate plan reviews. They allow you to make decisions on your own timeline rather than forcing family members to find solutions during an already challenging situation.
Updating a power of attorney is not necessarily a sign that your overall plan was poorly designed. It may simply mean that your life has changed since the document was created.
A Backup Plan Can Make a Meaningful Difference
Most people spend considerable time deciding who should serve as their primary agent. The backup choice can sometimes feel less important because it seems unlikely that the first person will be unavailable.
Over a long enough period, however, circumstances can change considerably.
The person who is your ideal choice today may be unable to serve 10, 20, or 30 years from now. Naming an appropriate successor helps your estate plan adapt to those changes.
It also provides clearer guidance to your family. Instead of trying to determine who should take responsibility, your wishes are already documented.
When Should You Review Your Power of Attorney?
You do not need to wait for your agent to tell you that they can no longer serve.
Consider reviewing your documents whenever there is a meaningful change involving you, your finances, or the people you have appointed. You can also make estate plan reviews part of your regular financial and legal planning.
During a review, consider whether:
- Your primary agent is still willing and able to serve.
- Your successor is still an appropriate choice.
- You would like to name an additional successor.
- Your financial circumstances have changed significantly.
- Other estate planning documents need corresponding updates.
A relatively simple review today can reveal gaps that would otherwise go unnoticed for years.
Plan for the People Behind the Documents
Estate planning documents are designed to provide instructions, but ultimately people are responsible for carrying them out.
That is why choosing the right individuals, preparing backups, and reviewing those decisions over time are so important.
If the person originally named in your power of attorney can no longer serve, having a successor already designated may allow your plan to continue functioning as intended. If no successor exists and you are still capable of updating your documents, addressing the issue sooner can help prevent uncertainty later.
Your estate plan should be able to evolve alongside your life. Periodically reviewing who you have selected to make important decisions is one of the simplest ways to keep that plan current and useful.
Contact Antanavage Farbiarz
If it has been several years since you reviewed your estate planning documents, or if someone you appointed can no longer serve, Antanavage Farbiarz can help you review your current plan and determine whether updates are appropriate.
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