ARE YOU NAMED AS POWER OF ATTORNEY FOR SOMEONE?
As a follow-up to our last article about the benefits of having a Durable Power of Attorney for Property (“DPOA”), this article discusses the responsibilities of the agent who is named under a DPOA.
If someone (called the “principal”) has named you as agent under his or her DPOA, and you have agreed to act for that person, you should understand exactly what are 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 finances and property must be for his or her best interests above all else.
In acting as agent, you must always use due care, competence, 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.
You must try to preserve the principal’s estate plan, so long as preserving the estate plan is consistent with the principal’s best interests. In addition, you must cooperate with whoever has the authority to make health care decisions for the principal–again, in the principal’s best interests.
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 these things. 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.
If you fail to act in good faith or are dishonest in your dealings with the principal’s money or property, a court can remove you as agent. You may also be liable for any damages, including attorney’s fees and costs, caused by your violation of your duties. If you were to go as far as steal or intentionally mishandle the principal’s assets for your own benefit, you could be investigated by the police.
You have the option of declining to act or resigning as agent, if you do not wish to take on the responsibility of acting as an 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, Waltz, Palmer & Dawson, LLC. would be happy to review the DPOA and discuss these issues with you, and with the principal, if appropriate. Please contact our office at (847) 253-8800 to schedule a no-charge initial consultation.
Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Business Immigration, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law.
This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.