Has Someone Named You as Their Power of Attorney?
If someone (called the “principal”) has named you as agent under his or her Durable Power of Attorney (“DPOA”), and you have agreed to act for that person, you should understand your responsibilities and duties to the principal. You are a “fiduciary”, and as a fiduciary, you have an obligation to act in the best interests of the principal. That means that all decisions you make and all actions that you take with respect to the principal’s financial affairs must be for his or her best interests.
Acting as An Agent
When acting as agent, you must always act competently and use due care and diligence. You must keep the principal’s money and assets separate from your own and keep complete and accurate records of all actions you take on behalf of the principal. Specifically, you must keep a detailed record of all receipts, disbursements, and actions that you have taken for the principal. It may become necessary for you to provide the accounting to the principal, another party, or even a court, if there is any question regarding any actions you have taken while acting under the DPOA.
In addition, you must cooperate with whoever has the authority to make health care decisions for the principal.
You may not exceed the authority granted to you in the DPOA, including any specific powers that are added to the DPOA. For example, if the DPOA does not specifically authorize you to make gifts of the principal’s assets or to make loans to yourself from the principal, then you cannot do so. Further, if those powers are granted in the DPOA, you must act only within the specific limitations included for such powers. If you become divorced or legally separated from the principal, or learn that the principal has revoked the DPOA or has died, you must immediately stop acting as his or her agent.
Failure to Act in Good Faith
If you fail to act in good faith or are dishonest in your dealings with the principal’s money or property, your actions may be challenged, and a court can remove you as agent. You may also be liable for any damages, including attorney’s fees and costs, caused by your breach of your fiduciary duties. If you were to go as far as steal or intentionally mishandle the principal’s assets for your own benefit, you could also be subject to criminal investigation for your actions.
You have the options of declining to act or resigning as agent, if you do not wish to take on the responsibility, or continue, to act as, agent. You would need to notify the principal and the successor agent named in the DPOA, if there is one, in writing that you are declining the agency or resigning as agent, so that the principal and/or successor agent can take appropriate actions.
If you have been named as an agent under a DPOA, and would like guidance as to your duties, responsibilities, and authority to take certain actions, we would be happy to review the DPOA and discuss these matters with you, and with the principal, if appropriate.