If you are named as an agent under a power of attorney, don't make this mistake!

Many of us at some point will find ourselves named as agent under a power of attorney for an aging family member or friend. While a power of attorney is a valuable tool to assist a family member, it is all too easy to unknowingly exceed your authority as an agent. If you exceed your authority, you can be personally liable. Even with the best of intentions, agents make this common mistake over and over!

The mistake is transferring the principal's assets into the agent's name. Never, ever move the principal's assets into your name or add your name to the principal's bank accounts or other accounts! This mistake can disinherit the principal's beneficiaries under a will or trust and may cause the agent to be personally liable for improperly converting the principal's assets to the agent's own use. This can also be viewed as a breach of an agent's duty to the principal.

That is not to say that an agent always moves assets with bad intentions. Many times, agents don't realize the legal ramifications of adding names to accounts or moving assets into the agent's name. The agent may intend to move the money back later and sometimes, an agent moves assets to protect an aging principal from spending money unwisely. Even though, the agent's goal is good, i.e., to protect the principal from his or her own bad decision-making, that does not make moving assets into the agent's name ok. Moving assets into the agent's name is generally not permitted. 

Moreover, a power of attorney does not allow an agent to substitute his or her wishes for the principal's wishes or to overrule the principal. Your duty as agent is to carry out the principal's wishes; not to substitute your own judgment or second guess everything the principal does. Sometimes this means, the agent has to stand back while the principal makes decisions the agent thinks are unwise. 

But there are limits to this. If you think the principal is making bad decisions because he or she has lost the capacity to make decisions due to dementia and the principal is uncooperative, then a guardianship may be necessary. This is where talking to an attorney can be helpful.

Being named an agent under a power of attorney is a big responsibility. Understanding your duties as agent is the key to avoiding liability. If you have been named as an agent under a power of attorney, it is a good idea to consult with an attorney about the specific power of attorney and to learn how you can safely carry out your duties under it.

If you have further questions about your duties under a power of attorney, complete the contact form on this page, call 704-887-5242, or email us at [email protected] 

DISCLAIMER: This is an advertisement and contains general educational information only. The information offered in this post does not constitute legal advice and reading the information does not create an attorney-client relationship with Nancy Roberts or the Law Office of Nancy L Roberts PLLC Firm. Before taking any action, you should always seek legal advice from an attorney you hire, who advises you based on your specific facts, circumstances, situation, and the appropriate governing law.

Image: Shutterstock

 

 

Nancy Roberts
Connect with me
Handling All of Your Family's Estate Planning Needs
Be the first to comment!
Post a Comment