A General Durable Power of Attorney grants an individual the power to handle another person’s finances and business. Often, an elderly parent grants this power to one or more of her adult children. Once a person accepts the responsibility of acting as agent under a power of attorney, the law imposes fiduciary duties upon the agent.
Simply stated, the agent’s fiduciary obligation requires the agent to make decisions that are in the best interests of the person who executed the power of attorney. An agent is required to keep his or her money separate from the principal’s and maintain full and accurate records of every action taken or dollar spent on behalf of the principal. Commingling assets and/or failing to keep a full and accurate record can expose an agent to significant liability including, but not limited to, a surcharge order from the Court requiring the agent to reimburse expenses for which he cannot provide an adequate explanation.
A Power of Attorney is a powerful and useful document. Having a valid Power of Attorney prepared enables loved ones to avoid the time and expense of going through a guardianship proceeding to assist a disabled family member. Prior to taking on the responsibilities associated with acting as agent, individuals should educate themselves with the ramifications associated with holding such a fiduciary position. We are able to assist in the preparation of Powers of Attorney or to provide guidance to agents in carrying out their duties. I can be contacted at 215-822-7575 or [email protected] to discuss these and related issues.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.