Montana Lawyer April/May 2024

Representing an Agent Under a Financial Power of Attorney from pg. 13

and costs paid on the agent’s behalf. § 72-31-322, MCA. The risk to the agent is in the phrase “would have been.” The statute seems to contemplate that the agent can be held liable for lost appre ciation, to the extent the asset actually would have appreciated in value and the value of the appreciation can be readily determined. V. Does the Agent Get Any Benefits from Serving In this Capacity ? It is not all gloom and doom for an agent. Unless the FPOA provides otherwise, the agent can accept a fee for assuming these risks and acting on behalf of the principal. There is no magic formula for determining what kind of fee to charge. In order to determine a rea sonable fee, the agent may consider call ing accountants near the principal and agent to determine what an accountant charges for bookkeeping services. If the agent is performing more complex tasks, such as investment decisions or making insurance claims, the agent should con sult with third party fiduciaries or those involved in similar services to determine the market rate. The agent should keep track of all of this information in case the principal or an heir or devisee later challenges how the agent arrived at the applicable rate. The agent should also keep a logbook describing the services provided on behalf of the principal and how much time the task required. Montana law also provides some protections for an agent acting on behalf of a principal. § 72-31-319(6), MCA, provides that an agent is not liable if the value of the principal’s assets declines unless the agent breached a duty to the principal. An agent is also not liable for the acts, errors of judgment or default of a person if the agent used his or her authority to delegate a task to another person and the agent used appropriate care, competence, and skill in selecting and monitoring that person. § 72-31 319(7), MCA. VI. How Does the Agent Accept the Role Under an FPOA ?

agent can give notice to the successor agent under the FPOA, co-agent under the FPOA, a guardian, or conservator. If none of these people exist, then the agent can give notice to the principal’s care giver, another person who has a vested interest in the principal, or a govern mental agency that has the authority to protect the principal’s welfare. VIII. Practical Tid-Bits. It is important to remember that the person seeking your advice about the FPOA “wears two hats,” meaning the agent has a fiduciary capacity and an individual capacity. The meeting with the agent should include a discussion about these dual roles and how, at times, they may conflict with each other. For example, an agent who is an heir of the principal’s estate may wish to skimp on the long-term care costs of the princi pal to preserve their inheritance when the principal’s interests would be better served by paying for a higher quality of care. The agent should understand, and your engagement letter should reflect, that you represent the agent in the agent’s fiduciary capacity and not in his or her individual capacity. As a result, your legal expertise will be applied to advising the agent on how to fulfill the agent’s duties and responsibilities and not advancing the agent’s individual interests. Finally, don’t forget to explicitly tell your agent not to steal from the princi pal. While it seems like common sense, as the adage goes, common sense is not so common. IX. Conclusion. FPOAs serve a valuable, and often underappreciated, role in taking care of our aging population. If you get the plea sure of representing an agent under an FPOA, and in addition to advising them on the topics discussed in this article, please thank the agent for assuming what is often a challenging and difficult role.

Assuming the agent wishes to pro ceed, the next step is determining how the agent accepts the role. § 72-31-318, MCA, directs us to look to the terms of the FPOA to determine how an agent accepts the position. In the absence of any directive under the FPOA, the agent accepts the role by exercising his or her authority under the FPOA, performing the duties of the agent, or any other ac tions or assertions that indicate the agent has accepted the role. § 72-31-318, MCA. In addition to these steps, the agent should also complete an agent’s certifica tion under § 72-31-354, MCA. In this author’s experience, the agent is going to have trouble accessing financial ac counts in the name of the principal using only the FPOA. Financial institutions are rightfully skeptical about allowing a third party to access the principal’s account(s) based solely on an FPOA. To address this issue, the Montana legislature balanced the concerns of the financial institutions with the needs of the agent to access the principal’s assets. The agent’s certification allows the agent to trigger the provisions of § 72-31-325, MCA. This statute provides that the person or entity has to accept the FPOA within five business days after receiv ing the certification unless an exception applies. To encourage financial institu tions and other individuals to accept the agent’s certification, § 72-31-324, MCA, limits the liability of a person that accepts an agent’s certification in good faith and without actual knowledge that the FPOA is void, invalid, terminated, or the agent’s authority invalid, or terminated. VII. How Does the Agent Resign or Decline the Role? The individual nominated under the FPOA may not want the responsibility of serving as an agent. The agent may also wish to resign due to changes in his or her circumstances. § 72-31-323, MCA, outlines how an agent resigns. The agent needs to give notice to the principal. If the principal is incapacitated, then the

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