Wednesday, August 22, 2012

I’m Power of Attorney for my Dad. What are my Duties?


Your aging father (or mother) has given you power of attorney to help them handle their finances. You have decided to accept this awesome responsibility. The time has come for you to step in and start acting on their behalf. Before you begin, you should consider the legal duties involved when you serve as someone’s power of attorney.

This article, and another one I will post in a few days, are intended to help you better understand and meet those responsibilities.

First, some terminology. The person who gave you power of attorney is generally referred to as the “Principal.” The person who is acting on behalf of the Principal is called the “Agent” or “Attorney in Fact” (that's you). As Agent you are acting as a “fiduciary.” A fiduciary is a person who has the responsibility for managing the money and property owned by another. The term fiduciary comes from the Latin word fiducia, meaning "trust.” Other examples of fiduciaries include Trustees, Guardians, and Executors.

As a fiduciary you have the highest legal responsibility to be faithful to the interests of your Principal. Your job is to act to protect and safeguard and benefit your Principal. You may not put your personal interests ahead of your duties to the Principal.

Pennsylvania law requires that, unless the power of attorney document specifically varies these duties, you must:

(1) Exercise the powers for the benefit of the Principal;

(2) Keep the assets of the Principal separate from your own;

(3) Exercise reasonable caution and prudence;

(4) Keep a full and accurate record of all actions you take on behalf of the principal including income and assets you receive and disbursements you make.

In Pennsylvania, if your power of attorney was signed after April 12, 2000, you must sign a form which acknowledges that you agree to follow the above 4 requirements. Unless your signed acknowledgment form is affixed to the power of attorney you do not have any authority to act. So don't forget to do this. [Note, this requirement applies only to powers of attorney for financial matters, and not to powers of attorney that are limited to health care decision making].

A reason that the law requires you to sign the acknowledgment form is to help ensure that you understand these responsibilities. Another reason is that your signature on the form makes it easier to sue you either civilly or even criminally if you fail to abide by these standards.

Being someone’s Agent is serious business. You need to understand this before you start.

In my next post, I will give you some additional guidance on how you can successfully go about meeting your responsibilities as your father’s agent. 


Click here to read Part 2 of this article.

5 comments:

Kate Dunkin said...

Great post Jeff! Francis S. Hallinan Esquire was just telling me about this because I told him about my cousin being in this same predicament. I'm going to make sure to share your post with him, thank you for posting this.

Quicklawdocs said...

In a simple word A personal Power of Attorney is a written document signed by you, giving another person the power to act in conducting your business, including signing papers, checks, title documents, contracts, handling bank accounts and other activities in your name, as you are the person granting the power.

Bobby Delaney said...

I have a health care power of attorney over my father and I am the executor of his will. He lives 2500 miles from me and because of recent medical condition will be in rehab for 60 days without any way of contacting the outside world except maybe phone. Is there any way I can use that healthcare power of attorney to contact his bank and become added to his account. He has a mortgage, light bill, water, sewer, cellphone, car insurance, etc that needs to be paid and I want to make sure he doesn't get into any troubles because he can't pay for those at the moment nor for the next 60 days.

Jeff Marshall said...

Bobby:

A health care power of attorney is normally limited to medical and personal care issues. You likely will need a financial power of attorney to have any authority over your father's financial accounts. contact an elder law or estate planning lawyer in the state where your father resides to discuss the matter further.

Luke Smith said...

I have heard of people becoming Power of attorney, but I didn't really know what that meant, or what it entails. I think it is smart to keep full, and accurate records of what you did as Power of attorney. I would feel that it would be a big responsibility go to a lawyer, and have the reign handed to you for someone else.