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.
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.
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.
Financial Obligations
An agent with a POA must manage the principal's funds and pay bills, including nursing home expenses, using the principal's assets. They cannot be personally liable for the bills unless they've signed an agreement making themselves responsible.
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.
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.
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.
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.
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.
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 you're wondering if power of attorney can be used to close a bank account, the short answer is “yes.” But whether you're the principal or the agent, you'll want to make sure the power of attorney documents are valid and explicitly give the agent the ability to close a bank account in the principal's name.
Key Takeaways: A Power of Attorney (POA) can sell property before death if explicitly authorized in the document, but authority ends immediately upon death.
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.
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.
Prosecutors are the most powerful officials in the American criminal justice system. The decisions they make, particularly the charging and plea-bargaining decisions, control the operation of the system and often predetermine the outcome of criminal cases.
The primary role of a Power of Attorney holder is to make decisions or perform actions on behalf of the principal when they are not capable of doing so themselves. This involves managing the principal's financial affairs, making medical decisions, and acting as their representative in legal matters.
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.
It's a completely valid, and sometimes responsible, choice to decide against serving as an agent under a power of attorney. If you choose to decline, the best thing to do is have an honest discussion with the person executing the power of attorney.
Durable Power of Attorney
Upon the principal's incapacitation, however, healthcare decisions are not the durable POA's responsibility. Instead, the durable POA makes financial decisions and pay bills relating to healthcare and treatment overall.
Even though you don't need to pay the principal's bills out of your own pocket, you do have some important financial responsibilities. Through the POA, you serve as an agent and fiduciary for the principal. That role makes you responsible for properly managing their money, assets, and debts.