Agent’s Guide to Durable Power of Attorney for Finance

Financial POA Agent Guide

You have been appointed the Agent in a Power of Attorney.

The role of an Agent is voluntary, so you are not required to serve. However, if you choose to accept the responsibility of Agent, you will have important duties and responsibilities to the Principal.

If you think you will be unwilling or unable to fulfill the duties of an Agent, tell the Principal immediately.

Tips on Performing Your Fiduciary Duty

  • Put the Principal’s interests above all others, including yourself.
  • Familiarize yourself with the authority delegated to you in the Power of Attorney.
  • Know whether the Power of Attorney becomes effective immediately or if and when the Principal becomes incapacitated.
  • Always act within the scope of the authority and power delegated to you in the Power of Attorney and do not undertake tasks that you are not authorized to do.
  • Be financially responsible when managing the Principal’s financial affairs, and fulfill your duties with care and due diligence.
  • Always keep the Principal’s property separate from your property. Do not transfer the Principal’s property into your name or into joint accounts.
  • Do not engage in “self-dealing” or otherwise compensate yourself beyond the terms of the Power of Attorney, and do not compensate a third party beyond the authority in the Power of Attorney.
  • Make full disclosure of all information relevant to the transactions you have engaged in on behalf of the Principal.
  • Immediately advise the Principal and make proper record of any money or property you have collected on behalf of the Principal.
  • Always obey the instructions of the Principal as long as they are lawful.
  • Maintain the Principal’s confidentiality and privacy, unless doing so would violate applicable disclosure requirements.
  • Do not accept any new obligations that are inconsistent with the duties owed to the Principal. An Agent should avoid conflicts of interest and act in accordance with the duties imposed by the Power of Attorney and applicable law.
  • Keep good records concerning your management of the Principal’s property and accounts, and account for all funds and property entrusted to you by the Principal.
  • Seek appropriate professional help such as a financial advisor, bookkeeper, accountant, attorney, or other professional when you need it.

Fiduciary Duty: A legal duty to act in the best interest of another person.

Frequently Asked Questions

When does a Power of Attorney take effect?

The terms of the Power of Attorney will determine when it takes effect. Some Powers of Attorney take effect as soon as they are signed by the Principal. Others, sometimes referred to as “springing” Powers of Attorney, take effect only upon the occurrence of an event specified in the document, such as a determination that the Principal is incapacitated. It is important to read the document to determine when the Power of Attorney takes effect.

What authority does the Agent have?

The Agent’s authority (or power) comes from state law and from the Power of Attorney document, which describes the duties and powers of the Agent.

When does the Agent’s authority end?

The Agent’s authority may end in several ways, including:

  • The Power of Attorney specifically states when the Agent’s authority ends.
  • The Principal revokes the Power of Attorney.
  • The Principal dies and the Agent knows of the Principal’s death.

Can an Agent be paid or reimbursed for expenses?

An Agent may be entitled to reimbursement for expenses reasonably incurred and may be entitled to reasonable compensation for his or her work, depending on the terms of the Power of Attorney and applicable state law. If an Agent seeks compensation, he or she should keep detailed records of the date the work was performed, the nature of the work, and the time spent doing the work.

Glossary

Agent: One who is authorized to act for, or in place of, another; also known as an “attorney-in-fact.”

Durable Power of Attorney: A Power of Attorney that remains in effect during the Principal’s incapacity.

Estate: Everything owned by the Principal, including personal belongings, real estate, savings, investments, life insurance, business interests, and employee benefits.

Fiduciary: A person to whom property or power is entrusted for the benefit of another.

Fiduciary Duty: A legal duty to act in the best interest of another person.

Incapacity: A mental or physical disability rendering a person incapable of managing his or her affairs.

Principal: The person who authorizes the Agent to act on his or her behalf.

Springing Power of Attorney: A Power of Attorney that becomes effective upon the occurrence of an event specified in the document, such as the Principal’s incapacity.

Successor Agent: The person the Principal appoints to serve as Agent if the original Agent becomes unable or unwilling to serve any longer.