Should I Appoint Co-Agents in My Power of Attorney?

It's possible to name co-agents in a power of attorney document who have equal authority and must act in the principal's best interest. However, co-agents can face conflicts, especially in urgent healthcare or financial decisions, which may delay necessary actions.

You're in the process of reviewing your power of attorney and have to decide on naming your agent. There are two people that you trust and can handle this responsibility, but the question is, which one should you choose?

Since you're at an impasse, you decide it may be a good idea to choose co-agents for your power of attorney.

This article examines whether it is possible to appoint co-agents under a power of attorney and the potential implications of that decision.

What Is a Power of Attorney?

A power of attorney (POA) is a legal document authorizing a designated person to act on behalf of another individual, usually called the principal. This designated person is your agent or attorney-in-fact.

A power of attorney is a crucial tool to plan for future financial and healthcare decisions. It is paramount that whoever you name as an agent is someone you can trust and can carry out your wishes.

What Is the Purpose of an Agent or Co-Agents?

An agent or co-agent has a fiduciary duty to act in the best interest of the principal. To be appointed as an agent or co-agent is a serious responsibility and role. As a part of their role, agents must work within the parameters outlined in the power of attorney.

From a legal perspective, two co-agents have the same rights as one agent under a power of attorney. Co-agents can have a wide variety of powers under a medical and financial power of attorney.

Some common decision-making powers may include:

• Ability to conduct banking transactions and pay bills
• Maintain properties and assets
• Dispose or convey title to a property or real estate
• Enter into contracts
• Apply for loans or discharge debt
• Buy or sell property
• Make investment, healthcare decisions, and medical treatment decisions
• Provide support for family members or beneficiaries

You need to decide whether these co-agents will make decisions jointly or independently of each other. For a co-agent to act independently, you, the principal, must specify this condition in your POA document.

How Do Co-Agents Work?

When co-agents act together, they are legally held responsible for their actions and conduct and must work within the rights given to them under the power of attorney. Co-agents are also required to agree on decisions made on behalf of the principal.

When the principal gives co-agents the right to act independently, they still have a legal duty to act in the best interests of the principal. This right must be explicitly noted in writing. Sometimes, the issue between co-agents who work separately or independently is that one isn't aware of what the other is doing.

This duty also includes co-agents monitoring each other. If one co-agent is making unjustifiable expenses or unreasonable decisions on behalf of the principal, it is the duty of the other to step in and stop this action or mitigate the consequences.

Can You Name Co-Agents?

Yes. You have the legal right to appoint multiple people as co-agents under a power of attorney. For example, parents may appoint two adult children as co-agents under a power of attorney or two different family members or professionals to handle financial and medical matters.

Why Do You Think You Want Co-Agents?

Although legally you can appoint two or more agents, that doesn't mean this is the route you should take. It may complicate matters in terms of administering your wishes under your power of attorney.

Yet, there are instances where individuals think having two co-agents could be beneficial. Individuals who have multiple children don't necessarily want to pick one child over the other, especially if sibling rivalry is at play. In order to avoid hurt feelings and the possibility of relationship-ending conflicts, parents will appoint children as co-agents. However, before you decide to appoint your children as co-agents, observe how they act toward each other and examine if their personalities will allow them to carry out your wishes. If one sibling disagrees with crucial financial decisions or medical decisions, a permanent rift between siblings is possible.

Children as Co-Agents

Parents who decide to appoint their children as co-agents also need to consider their children's strengths and weaknesses carefully. Taking into account whether your children are trustworthy, dependable, and capable of carrying out financial and medical duties is paramount. If your children are having difficulty managing their own finances, it may not be wise to appoint them as co-agents.

Non-Family Co-Agents

If you decide you want to appoint co-agents outside of your family or loved ones, like friends or professionals, make sure you clearly state your expectations. It may be a good idea to have a conversation about what you're asking and whether they are comfortable taking on this role. There is the risk that if one co-agent is a friend and the other is a professional, a disagreement could lead to a long, protracted debate about the best course of action. The friend may feel like they know what is in the principal's best interest because of the preexisting relationship, while the professional may feel differently. Squabbles of what's best and what's not may lead to future legal disputes.

In certain instances, appointing a co-agent may make sense. An elderly parent may decide to appoint a spouse and a child as co-agents so that the burden of caregiving and financial or medical decisions doesn't fall on one person. Before doing so, it is prudent to have a healthy discussion to determine if both parties are on the same page.

Why Co-Agents Can Be a Problem for a Healthcare POA

Having co-agents on health care directives always holds the possibility of conflict. Those conflicts may heighten when co-agents try to agree on an appropriate medical decision on the principal's behalf. Sometimes critical and timely health decisions need to be made, and if one co-agent is available and the other is not, potential treatment could be delayed. In those cases, the available co-agent may have to decide a course of action that the other co-agent may dispute in the future. Even when co-agents are available or accessible, they may disagree on medical decisions, treatment, potential risks, and expectations.

When siblings are co-agents in a healthcare power of attorney or living will, they may disagree on a do-not-resuscitate order, prolonging life support, funding for a nursing home, or long-term care. The interpersonal dynamics of the sibling relationship could impede essential decisions.

Why Co-Agents Can Be a Problem for a Financial POA

Having more than one agent for a financial power of attorney can create conflicts. For sibling co-agents, inheritance could be rife for arguments. One sibling may want to use a parent's funds for long-term care, while the other co-agent may not think this is a good idea because it may deplete a potential inheritance.

The more serious concern is when one co-agent thinks the other is mismanaging funds. This issue could occur after the principal has passed and the inheritance is smaller than expected. A potential conflict like this one could end up in court to determine if the principal's financial affairs were managed properly.

Sometimes, misunderstandings arise if one co-agent has been responsible for a parent's physical care, has incurred expenses taking care of the parent, and expects some kind of compensation but doesn't receive it.

Banks may also be reluctant to work with multiple agents on financial transactions because of the fear of fraud with bank accounts.

What if There is a Disagreement Between Two Co-Agents?

If there is a disagreement between two agents, there is a high likelihood the probate courts will get involved in resolving the dispute. Most likely, a judge will intervene and make a decision. Since different states have statutes regarding co-agents, the court will likely turn to previous precedents to make a ruling. During this time, decisions that are for the principal's benefit may be delayed.

What Are Reasonable Alternatives to Co-Agents for a POA?

When appointing an agent, it is key to avoid miscommunication and delays that could impact the principal. One possible option is to name a single agent as your power of attorney. You could name one individual as your agent for your financial power of attorney and name another individual as your medical power of attorney.

If you're still convinced co-agents are how you want to handle either your medical or financial power of attorney, you could name consecutive agents. If the primary agent is unable or unwilling to fulfill the obligations, then the secondary agent could take over. Naming consecutive agents could alleviate headaches in the future.

If You Want to Appoint a Co-Agent

If you have decided you want to appoint co-agents, have a discussion with those individuals (whether or not they are family members) and determine if everyone is on the same page. Consult with a law firm that specializes in estate planning or an elder law attorney for legal advice. They can help you identify the pros and cons of co-agents and help you with drafting estate planning documents.