Full question:
This question is about 'Durable Powers of Attorney for finances and the power he can be given regarding IRAs. My documentation says he may select payment options and possibly borrow from it. What about making withdrawals from my IRA's to pay medical bills and other bills? This is where most of my money is invested.
- Category: Power of Attorney
- Date:
- State: Illinois
Answer:
A power of attorney (POA) is a legal document that allows someone, called an agent or attorney-in-fact, to make decisions on behalf of another person, known as the principal. If the principal's decisions conflict with those of the agent, the principal's wishes take precedence, provided the agent consults with the principal first.
The agent must act in the principal's best interest and follow their directions. As fiduciaries, agents have a duty to keep their finances separate from the principal's, maintain detailed records of transactions, and cannot profit from their actions unless explicitly allowed in the POA. If an agent acts against the principal's interest or outside their authority, they may be held personally liable.
A general power of attorney grants broad authority, while a limited power of attorney may restrict the agent's powers, such as prohibiting withdrawals from IRAs. If your documentation allows the agent to select payment options and borrow from the IRA, it may not necessarily include the authority to withdraw funds for medical bills unless specifically stated.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.