An agent is a person chosen by another person to act on their behalf. The person who chooses an agent is often called the “principal.” The agent represents the legal rights and responsibilities of the principal, but the principal does not give up any of those rights when appointing an agent. The most common form of agency that our law firm works with is authority pursuant to the terms of a power of attorney.
Powers of Attorney are simple looking documents, usually not longer than four or five pages. New Mexico has statutes for three types of powers of attorney, a general power of attorney covering legal, financial and business matters, a health care power of attorney that is specific to medical issues, and a mental health care power of attorney that is unique to the mental health arena. The three statutes offer statutory forms for each of these powers of attorney.
You will see other types of powers of attorney as well. Banks and financial institutions offer powers of attorney for their clients. When you are admitted to a health care facility you will be given a brochure about “advance directives,” which are powers of attorney by which you appoint an agent to make decisions for you if you are in a terminal condition. The Social Security Administration recognizes a “representative payee” as an agent for a disabled recipient. And the Internal Revenue Service has its own power of attorney, Form 2848, which grants authority for a person other than the taxpayer to interact with the IRS on the taxpayer’s behalf.
It is not easy being an agent. One area of difficulty is ascertaining what the best interests of your principal are. The document, the Power of Attorney in which you are named as agent, should provide guidance as to the arenas in which you can act, such as banking, or real estate matters. The General Durable Power of Attorney references the various areas of authority listed in the statute. Just looking at the document itself, however, does not give the agent the detail that you might need. A more difficult issue is what is an agent to do when the principal does not agree with a decision made by the agent? A typical problem is whether or not the principal should be driving. The power of attorney does not give the agent the authority to restrict the rights of the principal or to coerce the principal to do something that he or she does not want to do.
A second difficulty that we see is that the agent’s authority is not honored by a third party. We see this in the health care arena, when a facility insists that its own policies trump the authority of the agent to oversee the health care of the principal. More than once already in 2011 we have advised clients about threats from residential facilities to send residents to the hospital over the direct orders of the agents. We also see it in the financial arena, when banks or stock brokers will not recognize the agent’s authority to act, and instead insist upon setting up a joint account or using their own in house power of attorney.
Agents may feel that they are caught in a mission impossible. It takes a great deal of time, attention, good judgment and energy to be an agent.