If you are the one who has been appointed to act as Agent under a person's Durable Power of Attorney, a simple mis-step and you can fall into the trap of assuming personal liability for the bills of the Principal (the person on whose behalf you are acting).
The answer to your question is NO. Being named a POA gives you the authority to act on the principals behalf. But, it does not result in the POA being obligated for any of the principal's debts and liabilities.
Simply put, you are only obligated to pay for bills out of the principal's assets. You do not have to pay any of the bills with your own money and should not face any financial liability.
There are some potential disadvantages of being a power of attorney. The POA must be able to make serious choices that could involve the person's health and estate. If you breach your duty, you could owe the principal compensation for damages. The principal could sue you if you did not act in their best interest.
Yes, you can sue a Power of Attorney (POA), or more accurately, the person appointed as an agent under a POA, if they breach their fiduciary duties or misuse their powers.
For example, for power of attorney to be durable in California, it must contain specific language to that effect. Power of attorney documents must also either be notarized or signed by two witnesses. These errors and others can render the power of attorney void.
Risk of Mismanagement or Abuse
Since the legal instrument grants considerable authority to these individuals, they might potentially use this power for personal gain. For instance, an untrustworthy agent could mismanage or steal financial assets, leading to significant asset loss or debt accumulation.
Making financial and legal decisions on behalf of the principal. Hiring third-party professionals (such as lawyers and CPAs) to assist with power of attorney responsibilities. Litigating on the principal's behalf in court. Making safe investments of the principal's assets.
They cannot be personally liable for the bills unless they've signed an agreement making themselves responsible. Review any contracts or documents carefully to avoid unintended personal financial obligations.
Your mother or father may have had substantial credit card debt, a mortgage, or cr loan. The short answer to the question is no, you will not be personally responsible for the debt, but failure to pay such a debt can affect the use and control of secured assets like real estate and vehicles.
Filial responsibility laws, also known as filial support laws, are legal statutes that require adult children to financially support their parents if they are unable to do so themselves. In California, these laws are outlined in Family Code Section 4400.
Things You Can't Do As a Power of Attorney Agent
Write a will for them, nor can you edit their current will. Take money directly from their bank accounts. Make decisions after the person you are representing dies. Give away your role as agent in the power of attorney.
An agent can only transfer money to themselves if the POA document explicitly allows it. Self-transfers without explicit authorization are generally considered a breach of fiduciary duty and can lead to legal consequences.
Having an IRS Power of Attorney provides numerous benefits, including reduced stress and simplified tax management. A representative can handle tasks like submitting forms, addressing IRS notices, negotiating payment plans, ensuring compliance with tax laws, and acting in the taxpayer's best interest.
What are the liabilities of being a power of attorney? As an attorney-in-fact, you may be contacted by creditors of the principal for debts owed; however, you are not financially liable. Nevertheless, the creditors do have the right to attempt to collect payment from the principal.
Can a Nursing Home Override a Power Of Attorney? Generally, a nursing home cannot override the decisions made by an agent with power of attorney. The purpose of a POA is to give a trusted individual legal authority to act on the principal's behalf when they can no longer make decisions.
If the principal wants to see the visitor, the POA cannot interfere. If the principal lacks mental capacity, the POA (a/k/a the attorney-in-fact) may control most aspects of life. However, restricting access to friends and family is not normally done unless necessary to protect the principal.
Is an attorney more powerful than a lawyer? Not necessarily. While attorneys specifically represent clients in court, both lawyers and attorneys have the same level of legal education and training. The distinction is more about their role, rather than their power or authority.
A financial power of attorney is a legal document that authorizes an agent to act on your behalf in financial matters. Financial POAs function as proof that the designated agent has the power to manage the principal's finances.
A Durable Power of Attorney is a powerful and sustainable estate planning instrument. Important to note, the Durable Power of Attorney is effective as soon as you (i.e., the Principal) sign the document.
Criminal Penalties
Many types of power of attorney abuse involve theft, which could occur where the agent steals the principal's assets or commingles the principal's assets with their own assets. Misappropriation of the principal's assets through larceny is punishable as a criminal matter in California.
Can a spouse override power of attorney? As a legal designation, power of attorney always takes precedence over the wishes of a spouse. If one has concerns about their partner's chosen agent, they'll still need to follow the steps outlined above.
Two siblings can share power of attorney, allowing them to jointly manage a loved one's affairs. This arrangement requires careful consideration of various aspects to ensure efficacy and harmony.