Estate Planning – Answers about Powers of Attorney Series #6

by Bob Frie

Being designated as the agent in a power of attorney is a position of responsibility. It is important that anyone executing a power of attorney know the importance of their agents’ actions.

Can a principal hold an agent liable for the agent’s actions?

“Agents are considered a “fiduciary” meaning they must act with the highest degree of good faith on behalf of the principal. Therefore, they must follow any and all instructions given by the principal. Although, if the wishes of the principal are not specific the agent does have some free will to decide what is best for the principal. They must remember to act as the principal and not in their own interests. If they fail to do so they can be held liable for their actions.”

What if I think someone is misusing a power of attorney?

“Financial exploitation, which includes the illegal and/or unauthorized use of an individual’s funds, property, or resources for profit or advantage, is on the rise and requires prompt reporting.” “If you suspect your agent is misusing a power of attorney, immediate action should be taken by requesting an accounting and revoking the power of attorney. If you suspect someone else’s agent is misusing a power of attorney or that power of attorney is illegitimate, immediate action should be taken by contacting Adult Protective Services.” “Also, any person interested in the welfare of the Principal who suspects and Agent is misusing a Power of Attorney can make a written complaint to a court in the county where the Principal resides. If an Agent has misused a Power of Attorney, the court can force the Agent to return any stolen assets.”

Should an agent keep any records?

“Agents are required to keep records of their actions as power of attorney so they are able to answer any questions from the principal or others. By law the agent must be able to provide an accounting to the principal and anyone else designated on the power of attorney.

The most important…rule for an agent is to maintain separate account; an agent should never amalgamate their own finances with the principal’s.”

Stay tuned to our blog for more explanations and answers to common questions on powers of attorney.

 

This article was published as a pamphlet as a public service by the Colorado Bar Association. Its purpose is to inform citizens of their legal rights and obligations and to provide information regarding the legal profession and how it may best serve the community. Before relying on this information, consult an attorney about your individual case.