Valerie K. deMartino
444 West Ocean Blvd., Suite 400, Long Beach, CA  90802
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"Responsibilities of an Agent under a Power of Attorney"
by Valerie K. deMartino

We draft powers of attorney every day for clients who appoint their children as alternate agents. Many of these adult children do not know they are being appointed, nor have they been advised of their potential responsibilities. Lawsuits against agents has been increasing in recent years (mainly by siblings who were not in control of the parent's assets against the brother or sister who was named as the agent under the parent's power of attorney) and many agents have unwittingly gotten themselves in trouble.

When you agree to serve as attorney-in-fact under a Power of Attorney you become a fiduciary. A Power of Attorney permits the person named as Agent to act on behalf of the Principal. The Agent is not obligated to serve. Once an Agent accepts responsibility, however, he or she has a duty to act prudently. As a fiduciary, the Agent is held to the highest standards of good faith, fair dealing, and loyalty to the principal. The Agent must always act in the best interest of the principal which sometimes puts them in conflict with their own interests.

Although the Principal has named an Agent, the Principal may still act for himself or herself as long as he or she is competent, including revoking the Power of Attorney.
If you are appointed as an Attorney-in-Fact and agree to act, you should first read the Power of Attorney carefully. Know what acts it gives you authority to perform. Some powers of attorney confer broad powers and others are limited to specific actions. You may only do the things the Power of Attorney authorizes you to do. It is your primary obligation to carry out the instructions and wishes of the Principal.

Some banks, brokerage houses, mutual funds, and insurance companies, may not recognize your authority unless their own form is signed by the principal. You should investigate this and have the Principal sign those forms if he or she is able. Once he or she becomes incapacitated, mentally or physically, it may be too late to get the signature you need.
Ask the Principal to give you a list of his or her assets so you will know what you are responsible for. As an Agent acting under a general power of attorney, you are responsible for keeping the assets safe and insured. Always keep the Principal's assets separate from your own. Do not commingle them with your assets or those of anyone else. I cannot stress this enough. Keep good records ­ you may be required to account for use of the Principal funds several years later. You should not make gifts to yourself, borrow from the Principal, loan the Principal's money to other family members, or sell any of the Principal's property to yourself, your friends, or your relatives even at a fair price unless the Power of Attorney makes it specifically clear that you can (and even then it is not advisable).

Whether or not an Agent is entitled to a fee for his or her services depends on the Power of Attorney. If fees are authorized, they should be reasonable. Remember, the court may later scrutinize them. Keep accurate time sheets to support your fees.
If you have questions, or need a power of attorney for financial management or health care, call me.

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