Why Naming a Friend as Your Power of Attorney May Not Be the Best Choice

Choosing the right person to serve as your Power of Attorney (POA) is crucial. While you may want to name a close friend, this role is more demanding than many people realize. Serving as a POA is not a compliment—it is a responsibility that can feel like a part-time job, requiring time, effort, and a strong understanding of financial matters. Before asking a friend to take on this role, consider whether it might be more of a burden than a favor.

The Responsibilities of a Power of Attorney

A POA must:

Manage financial accounts and pay bills
Handle investments and real estate matters
Coordinate with attorneys, accountants, and financial advisors
Maintain records and ensure compliance with legal obligations
Step in during times of crisis, such as illness or incapacity

These responsibilities can quickly become overwhelming, particularly if the friend has their own personal or family obligations. While a trusted family member who is organized and financially savvy is often the best choice, many people do not have a relative to rely on.

The Risk of Overburdening a Friend

Friends may not be the best choice for a POA because:

They may lack the necessary financial or legal knowledge.
They might feel obligated to take on the role even if they are not prepared.
Their life circumstances—such as work, caregiving responsibilities, or health issues—could make it difficult for them to fulfill the role effectively.

A real-life example illustrates how these issues can arise:

The Importance of Asking First: Sarah’s Story

Sarah was shocked to discover that her friend, Kathy, had named her as POA without discussing it with her first. When Kathy developed dementia and required nursing home care, Sarah suddenly found herself responsible for managing Kathy’s finances, maintaining her vacant home, and handling other legal matters. Already dealing with her husband’s illness, Sarah was completely overwhelmed.

Without a backup POA or a Power of Substitution clause in the document, Sarah had to petition the court for a Conservator to be appointed. Ultimately, a court appointed a stranger to handle Kathy's affairs. Had Kathy discussed this role with Sarah in advance and named a professional as a backup, this stressful situation could have been avoided.

Alternatives to Naming a Friend

If you do not have a reliable family member, consider these alternatives:

Hiring a Professional Fiduciary – Professional POAs, such as elder law attorneys or fiduciaries, have the expertise and resources to handle complex financial and legal matters.
Naming a Professional as a Backup – Even if you name a trusted friend or family member, appointing a professional as an alternate can provide peace of mind. This allows your friend or family member to decline if they are not up for the job.
Including a Power of Substitution – This provision allows the named POA to designate someone else if they become unable or unwilling to serve.

How to Make Things Easier for Your Power of Attorney

If you do name someone as your POA, preparing in advance can make their job more manageable:

Stay Organized – Maintain a clear list of assets, update it annually, and store it in a secure but accessible place.
Provide Access – Make sure your POA knows how to access a key to your home and any relevant documents.
Check Financial Institutions’ POA Requirements – Some companies, like Vanguard and Fidelity, have their own POA forms that must be completed separately.
Leave a Financial Gift—If you expect this much responsibility from your friend, consider leaving them some money in your Will or Trust to acknowledge and compensate them for their time and effort.

Final Thoughts

While it might feel natural to name a friend as your POA, it is important to consider whether this is the best decision. The responsibilities can be significant, and choosing someone willing, capable, and prepared to take on the role is crucial. If you are uncertain, consulting with an elder law attorney can help you develop a plan that ensures your affairs will be handled smoothly and responsibly.

Senior Solutions, Attorneys at Law, is an Estate Planning and Elder Law firm serving the Greater Boston, Massachusetts area since 2001. We are ready to help you with Medicaid Planning, Estate Planning, Probate, Guardianship & Conservatorships, Special Needs Trusts, and Fiduciary Services. We are here to help. Please call our office at 617-489-5900 or schedule a brief free consultation (offered to new clients) by clicking: https://seniorsolutions.as.me/FreeConsult