Most people don’t know that the agent under a power of attorney owes duties to the principal (creator) of the power of attorney. Most mistakes that happen which create litigation in the power of attorney area are related to mistakes that create mistrust among family members.
What to do with a power of attorney once some one gives one to you?
You can use a power of attorney to manage someone’s bank accounts and transactions, real estate transactions, and many other things, as long as the power of attorney has specifically allowed for these powers. Most power of attorneys DO NOT allow gifts to the agent in the power of attorney. Statutory power of attorney forms in California have specifics about powers of attorney that prohibit gifts, unless the principal has specifically provided for it.
How to avoid the top ten mistakes in managing assets of a person who gave you a power of attorney?
- If you are the agent, separate your assets from the assets of the principal. Keep a separate account for the principal.
- Document everything. Track each receipt, and each expense you paid for your principal.
- Track all income your received which belonged to your principal. Don’t deposit these in your personal account.
- Identify yourself as an agent under a power of attorney on bank accounts.
- Know that you owe fiduciary duties to your principal.
Where to get advice about power of attorney documents?
Generally, our staff attorneys can give you advice about any type of power of attorney. The different types of power of attorney are: 1) Special or limited power of attorney; 2) Durable Power of Attorney; 3) General power of attorney. It is very important that you review the power of attorney documents for effective date, and types of power that are given in the instrument.
Can you prevent the creator of the power of attorney from acting?
Generally, no. So, technically, if a principal of a power of attorney wants to act, he can do so, until and unless a) he is incapacitated, and b) the court issues an order prohibiting him to act. It works like this: Mr. Principal can enter into contracts, even if he has given a power of attorney to his son as an agent to manage his contracts. It sounds crazy, but the only way that son can prevent his father from acting, is to go to the court and get the conservatorship court to issue an order that his father cannot enter into contracts.
If a principal of the power of attorney becomes incapacitated, as agent, you can do some things to help in this situation. You can notify the banks, and record your power of attorney in the county regarding real estate transactions. So, technically, if an agent has a proactive role, but his protective powers are in fact limited. Ask us how a power of attorney relates to conservatorship.
To learn more about power of attorney duties and liabilities, call our attorneys, Mina Sirkin and Evan Sirkin who can guide you about each power of attorney duty. Call now: 818.34.4479 or email us here: firstname.lastname@example.org