Can a Power of Attorney use funds for personal use?

Full question:

Is it legal for a Power of Attorney to take funds from the 'unnamed' account for personal use? What is the law? I have proof.

• Category: Fiduciary Duty
• Date: 04/07/2025
• State: Georgia

Answer:

The legality of a Power of Attorney (POA) using funds from an account for personal use depends on the authority granted in the POA document and the intended use of those funds. The agent, or person designated as the POA, has a fiduciary duty to act in the best interest of the principal (the person who granted the POA). This means the agent must follow the principal's instructions and cannot use the principal's funds for personal benefit unless explicitly allowed in the POA document.

Agents must keep their personal finances separate from the principal's and maintain detailed records of all transactions made on the principal's behalf. They cannot profit from their role or make gifts from the principal's assets unless the POA document clearly permits such actions.

If a fiduciary duty is breached, several remedies may be available, including a petition for an accounting, claims of breach of fiduciary duty, theft, conversion, or fraud. The agent has two main duties: loyalty and care. The duty of loyalty requires the agent to act solely in the principal's interest, avoiding any conflicts of interest. The duty of care means the agent must perform their responsibilities competently and thoroughly.

To establish a breach of fiduciary duty, the following elements must be proven: (1) a relationship of trust exists between the plaintiff and defendant; (2) the defendant breached their duties; and (3) the plaintiff suffered damages. Defenses against such claims may include the statute of limitations, lack of fiduciary relationship, lack of standing, approval from the principal after full disclosure, and the business judgment rule.