what is agency by necessity 
agency by necessity is a type of legal relationship in which one party can make essential decisions for another party until legally recognized agents like someone with power of attorney or guardianship are put in place the courts recognize agency by necessity during an emergency or urgent situation under which the beneficiary is unable to provide explicit authorization under such circumstances those granted agency must act for the sole benefit of the beneficiary in finance agency by necessity often takes the form of replacing an individual s investment or retirement decisions understanding agency by necessityemergency situations often lead to agency by necessity in the eyes of the court for example if an individual is sick and unable to make a critical investment or retirement decision agency of necessity would allow an attorney parent or spouse to make decisions on behalf of the incapacitated party agency by necessity becomes important in wealth management for example many wealth managers are involved in the creation of wills trusts and overseeing inheritances of wealth from one generation to the next if a family member in possession of or who is an agent of the family s wealth becomes incapacitated in an accident or is ill another close family member of similar capabilities and understanding of the family finances may take over as an agent of necessity at times this can become fraught however particularly in cases of high net worth individuals or wealthy families that have to make decisions about wealth distribution for future generations family members and additional stakeholders may take issue with decisions that the agent by necessity makes agency by necessity and estate planningalthough many conduct their estate planning before becoming incapacitated at times these tasks may be given to an agent by necessity estate planning entails a variety of critical tasks such as the bequest of assets to heirs and the settlement of estate taxes most estate plans require the help of an attorney estate planning can also take into account the management of an individual s properties and financial obligations if the individual owes debts and is not of sound mind to pay them an agent by necessity may step in to figure out a plan for repayment the assets that could comprise an individual s estate include houses cars stocks bonds and other financial assets paintings and other collectibles life insurance and pensions these must be distributed as the individual has chosen after passing in addition to preserving family wealth and providing for surviving spouses and children many individuals will undertake serious estate planning to fund children or grandchildren s education or leave their legacy to a charitable cause specific estate planning tasks could include but are not limited to 