AGENT’S GUIDE TO DURABLE POWER OF ATTORNEY FOR FINANCE
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.
Fiduciary Duty:
A legal duty to act in the best interest of
another person.
• 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 there are lawful.
•
Do not accept any new obligations that are inconsistent with the duties owed to the principal. An agent can only represent the interests of more than one principal once full disclosure has been made to all principals involved that there is a conflict or potential conflict, and only after all principals have consented.
• 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.
• Maintain the principal’s confidentiality and privacy, unless doing so would violate disclosure requirements about the property’s condition.
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Frequently Asked Questions
Glossary
When does a power of attorney take effect?
The terms of the power of attorney will determine when it takes effect. In general,
a power of attorney becomes effective depending on what type of power is involved.
The first power is referred to as a “springing power,” which means that the power
of attorney will take effect only when it has been determined that the principal is
incapacitated. The second power is a “standing power,” which takes effect as soon as
it is signed by the principal. It is important for you 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 can end in three ways:
• The power of attorney specifically states
when the agent’s authority ends;
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.
• The principal revokes the power of attorney;
• The death of the principal occurs and the agent
knows of the principal’s death.
Can an agent be paid or reimbursed for expenses?
An agent may be reimbursed for expenses reasonably incurred and receive
reasonable compensation for his or her work, unless the power of attorney
specifically states otherwise. 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.
Fiduciary Duty: A legal duty to act in
the best interest of another person.
Incapacity: The mental or physical
disability rendering a person incapable
of manage his or her affairs.
Principal: The person who is requiring
the agent to act on his or her behalf.
Springing Power of Attorney:
A power of attorney that becomes
effective upon he principal’s disability.
Successor Agent: The person the
principal appoints to serve as agent
if the original agent becomes unable
or unwilling to serve any longer.
Agent:
One who is authorized to act for or in place of, another.
Also know as an “attorney-in-fact.”
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