When you are no longer able to make decisions regarding your business or finances, you can designate someone to make those decisions on your behalf. Such authorization is done through a legal document known as a power of attorney, and the person you appoint is known as an agent.
You may have a concern about whether the agent can do anything they please with your property or finances in general. Well, the short answer is no, but it all depends on the terms of the power of attorney document.
Do they have general or limited powers?
Usually, the agent’s powers may be limited or general. Limited power of attorney means that they can only act on your behalf in specific matters or events. For instance, you can appoint them to deal only with your bank account. It means that they cannot act on your behalf on anything outside that. On the other hand, a general power of attorney grants your agent broader authority to act on your behalf in any matters allowed by the law.
Your agent owes you a fiduciary duty
Either way, with general or limited power of attorney, the designated person should always act in your best interests. They owe you a fiduciary duty and should always put your interests first. If it is not the case, you can seek legal recourse or revoke their power of attorney.
Planning for incapacitation is essential to your business. However, it is important to review the power of attorney you intend to grant to your agent and ensure that you fully trust them. Since they will be acting on your behalf without direct oversight, a lot could go wrong, which is why you need to stay ahead of the situation.