A person in Nevada who is creating an estate plan may want to include a power of attorney that gives someone the ability to take over financial transactions and decision-making if the person becomes incapacitated. Most people who have power of attorney understand that they are obligated to act in the best interests of the person that they represent, but they may not fully understand the extent of the record-keeping they are required to do.
This is known as the “duty to account.” A person who has power of attorney must keep records of all transactions, including receipts, checks and any other documents. Transactions must be accurately recorded. If these types of records are not kept, the person who has power of attorney could be vulnerable to accusations of abusing the position.
This could mean that even people who are trying to fulfill their fiduciary duties might find themselves financially liable if they do not keep accurate records. The estate or others could face liability as well. Therefore, it is important that a person who acts with power of attorney fully understands the responsibilities and consequences.
This understanding and responsibility is critical for other roles within the estate plan as well. A person who is creating an estate plan should think carefully about the requirements of each role and who would be best suited for them. For example, an executor does not have to be a legal or financial expert, but this person needs to be trustworthy and organized. A person who has health care power of attorney should be prepared to make medical decisions on a person’s behalf. One common error in estate planning is appointing a family member as a trustee without fully understanding the extent of the responsibility involved. It may be best to add a corporate co-trustee to help manage a trust.