Your loved one has entrusted you with power of attorney, giving you the legal right to handle their finances, including taxes, bills and real estate transactions if they are unable to do so. It’s a big responsibility, but what does it mean?

It’s possible to be named power of attorney, also known as agent or attorney-in-fact, and not have any responsibilities at the moment. You’ll only take on these duties if something happens to principal, which is the legal term for the loved one who granted you power of attorney.

Here are five things you should know about taking on the role:

1. The paperwork rules.

Your duties should be spelled out in the legal documents. A power of attorney is most often responsible for financial management and would have access to bank accounts, safe deposit boxes, estate documents and could make decisions about purchasing insurance, government benefits and filing tax returns. A principal can limit the powers granted to an agent, so it’s important to review the documents with your loved one and the lawyer who prepared them to clarify your responsibilities.

2. Avoid conflicts of interest.

A power of attorney must make decisions in the best interests of the principal, which means acting in accordance with their expectations; acting in good faith; and limiting your role to the scope of the responsibilities you were granted. Conflicts of interest could include transferring assets to your name; borrowing or lending money; or making changes to their estate. Powers of attorney have fiduciary responsibilities and violating those duties can result in criminal or civil charges.

3. Sign on the dotted line.

When it comes time to sign documents on behalf of your loved one, remember to sign as their agent. It needs to be clear that you are acting as power of attorney, which could mean signing in a specific format such as, “Jane Smith under POA for John Jones.” Ask about any preferred format for your signature before signing — and remember to bring your power of attorney documents when conducting transactions in this role.

4. Keep careful records.

You’ll need to document all financial transactions, including receipts of bills paid, income collected and assets sold or traded. Maintaining a paper trail reduces your liability. Keeping records is especially important if you are claiming compensation for taking on the role. You’ll need to document how much you were paid and justification for the compensation. For example, if you made a 50-mile round trip to conduct a transaction, you’ll need to document the mileage, save gas receipts and document the standard IRS mileage rate.

5. Ask for help.

If you’re unsure about your responsibilities or need guidance in carrying out your fiduciary duties, call a professional. The lawyer who created the power of attorney is a good place to start. Your job is to protect your loved one’s best interest while protecting yourself from liability.