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.
Through the use of a valid Power of Attorney, an Agent can sign checks for the Principal, withdraw and deposit funds from the Principal's financial accounts, change or create beneficiary designations for financial assets, and perform many other financial transactions.
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.
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.
While you aren't financial liable, as the attorney-in-fact, you're still the point of contact for the principal's debts. Creditors have a right to attempt to collect the funds that are owed.
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.
One major drawback of joint bank accounts is the automatic transfer of ownership upon the death of one account holder. This can bypass the deceased's will and complicate estate planning. A POA does not grant ownership; it merely allows the agent to act on behalf of the principal.
Misappropriation of the principal's assets through larceny is punishable as a criminal matter in California. Petty theft (up to $950) is a misdemeanor and is punishable by a fine of up to $1,000 or six months in county jail or both.
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.
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.
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.
This can include a wide range of financial tasks, such as managing bank accounts, paying bills, handling investments, filing taxes and conducting real estate transactions.
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.
A power of attorney cannot change a properly written will. However, such a person can make many changes to the assets surrounding that estate. Here is how it works. Estate planning can get complicated, quickly; working with a financial advisor goes a long way to simplifying the challenge.
Power of Attorney (POA) is a Powerful Legal Document
Depending on the type of POA, your agent can withdraw money from your bank accounts. First, let's look at a POA with even more power than taking money out of your accounts. The healthcare POA is close to having power over life and death.
While sharing a joint bank account is a convenient option to assist in your parent's finances, it does present some risks, such as: Financial risks with joint accounts: With any joint account, each account holder could be impacted by the financial decisions of the other.
Most joint bank or credit union accounts are held with “rights of survivorship.” This means that when one account owner dies, the money passes to the surviving owner, or equally to the rest of the owners if there are multiple people on the account.
Potential Disadvantages of Being a Power of Attorney
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. A POA could be held responsible if they sign an agreement that could hold them financially liable.
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.
To pay yourself, keep detailed records of your tasks and time spent, document payments, and consult the POA document to confirm authorization. Seek approval from the principal (if possible) or relevant family members to maintain transparency.
When a loved one passes away, you'll have a lot to take care of, including their finances. It's important to remember that credit card debt does not automatically go away when someone dies. It must be paid by the estate or the co-signers on the account.
Limits of a Power of Attorney in Property Sales
The agent can legally proceed with the sale if the POA grants the authority to sell certain property, whether real estate, personal property, or other assets like stocks. However, the agent cannot sell the property if the POA doesn't explicitly grant this authority.
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.