A financial power of attorney gives the named agent the power to handle the finances of the principal. But, as they say, “With great power comes great responsibility.” Court disputes over alleged abuse of this power by an agent are becoming more prevalent. Did you know that an agent must act solely for the benefit of the principal and the agent’s actions can be put under a legal microscope if ever questioned?
The common problem: A child/agent is named as the parent/principal’s power of attorney, and after being appointed, the child receives something of value now or in the future from the parent. If the child’s actions are questioned in court by another sibling or relative after the parent becomes incapacitated or dies, then the child has the burden to show evidence that the child did not unduly influence the parent and the child could be required to account to the court for all activity conducted for the parent.
To avoid or minimize agent disputes, the principal should work with an attorney to make his or her intentions known and to keep the agent out of hot water. An agent should know his or her responsibilities before beginning to act as agent. We can help with both.
