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).
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.
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.
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.
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.
Yes, line 10 of your PoA likely pertains to real estate transactions and property management, which could include actions such as evictions. If line 10 specifically grants you the authority to manage, sell, lease, or otherwise deal with property, it would apply to your situation.
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.
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.
If you're a cosigner, then yes, you would be responsible, but that has nothing to do with being a power of attorney. So if you're serving purely as a POA for someone, their debts are your concern (because you need to decide how they're handled), but they aren't your personal responsibility to repay.
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.
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.
You're not personally responsible (though you might sign checks from that relative's account to pay balances, depending on the POA requirements). Nothing should come out of your pocket.
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.
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.
If the agent acts outside of the scope of the POA, then the agent could be held liable. In addition, if the agent signs a contract on behalf of the principal and does not put POA after the agent's name, then the agent could become personally liable for that contract.
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.
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.
Elderly victims of Power of Attorney fraud may also be entitled to attorneys' fees and expenses and treble (triple) damages under § 3345 of the California Civil Code, which applies when the abuse involves unfair or deceptive practices that the perpetrator knew or reasonably should have known would cause financial harm ...
A power of attorney gives one or more persons the power to act on your behalf as your agent. The power may be limited to a particular activity, such as closing the sale of your home, or be general in its application. The power may give temporary or permanent authority to act on your behalf.
“In California, for example, if they're paying rent and you want them out, they may be entitled to 30 days' notice. If they're there for more than one year it's 60 days' notice. And every time you accept rent, the clock starts again,” he says.
Since your power of attorney potentially will be handling your legal and financial affairs, you'll want to choose someone who either has some experience in these fields or has the personality and financial savvy to handle the decisions that may fall to him or her. Choose someone who: Is trustworthy and fair minded.
The positions of power of attorney and executor are distinct legal roles. An executor administers a person's will after their death. A power of attorney may be granted authority to make decisions on behalf of another person in the event they are incapacitated and unable to act during their lifetime.