An agent, sometimes called the attorney-in-fact, is authorized to act on behalf of someone else or on behalf of a legal entity. Sometimes agents are hired to represent a client in negotiating the terms of an agreement.  An example might be a literary agent representing an author in her negotiations with the publishing company.  Another example could be someone who hires a lawyer to negotiate the terms of an employment agreement, licensing agreement, or any other important contract. For estate planning, you may want an agent for healthcare and one for finance.  

Two important documents created as part of the estate plan are the healthcare directive (the “Directive”) and the HIPAA Authorization. This is a legal document that provides instruction for the agent in the event the principal becomes incapacitated. The principal is the person on whose behalf the agent operates. The agent for healthcare is authorized to stand in the principal’s shoes when they cannot make healthcare decisions on their own behalf. It is an important role. The person you choose to step into that role should be selected carefully. Why? Because they have access to your private medical information, they could be authorized to make such health care decisions as 

  • whether to consent to or refuse medical treatment for you,
  • which health care providers or hospitals to use for your care.

Another vital estate plan document is the durable power of attorney for finance. Like the Directive, this legal document instructs the agent on what to do if the principal becomes incapacitated. A power of attorney potentially grants the agent the authority to step into the principal’s shoes and make financial decisions, such as dealing with financial institutions, brokerage houses, real estate brokers, and the IRS. 

Again, you must choose carefully. Most people assume that they should designate their spouses as their agents.  But that’s not always the person best suited for the job. Below are some factors to consider when choosing an agent for healthcare and finance.

Factors to Consider in Choosing Your Agent

  1. Emotional fitness for the job. Handling stress is not a skill we learn at birth. Nor are most of us taught it at home.  We learn how to handle stress over time, and we each handle it differently. Effective agents set aside their emotions to make intelligent decisions. They also need to be assertive enough to act as a strong advocate. It would be best if you chose someone who can reason in emotionally challenging circumstances. A non-family member might be the best person for the job.
  2. Geographic proximity. It would be optimum to choose agents who live close to you, especially your agent for healthcare. That would enable them to act quickly in a medical emergency. Having your agent for finance close by would also be wise in the event they need to meet with your bank.
  3. Willingness/ability to serve. Acting as an agent is time-consuming. It can often be emotionally draining. It would be best if you discussed with your proposed agent what is expected of them. Get the proposed agent’s permission before formally appointing them.  Don’t just assume the person you want to be your medical agent is willing. Surprises can be disastrous for you. If you are elderly, consider appointing a younger person. There is a greater chance that an older person might simultaneously become mentally or physically impaired than you. 
  4. Ability to make decisions per your wishes. Your agent must make decisions on your behalf that YOU want. They must follow your wishes if you have spoken about them.  This is an important point.  Even if the agent disagrees with your choices, they have to abide by them, So make sure you select someone who will abide by your wishes and not go rogue.

People You Should Not Choose

In some states, healthcare providers are prohibited from acting as agents for healthcare, even if they are the most qualified. Likewise, some states forbid minors from being a patient’s advocate. States vary as to how they define the age of majority. Some say it’s 18 or 19, and some say 21 or 22.  Know the law in your state.

Francine D. Ward
Attorney-At-Law, Author, Speaker

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