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Power of Attorney
Does a power of attorney have a reporting mandate or duty to siblings on where money is being spent?

Does a power of attorney have a reporting mandate or duty to siblings on where money is being spent?

Full question:

does a power of attorney have a reporting mandate or duty to siblings on where money is being spent?

Category: Power of Attorney
Subcategory: Agent
Date: 04/07/2025
State: Tennessee

Answer:

The agent or attorney in fact has a fiduciary duty to the principal in how he or she performs the duties under the power of attorney. This means they must act with the utmost honestly and good faith. The agent can be liable for breaching this duty. The principal, or if the principal dies, the heirs could make a claim against the agent for breach of duty.

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.

FAQs

What are the disadvantages of being a power of attorney?

Being a power of attorney (POA) comes with significant responsibilities and potential disadvantages. The agent must act in the principal's best interest, which can be stressful and time-consuming. They may also face legal liability if they mismanage funds or fail to fulfill their duties. Additionally, the agent's decisions can lead to family disputes, especially if siblings or other relatives disagree with financial choices. Lastly, the agent may have to deal with the emotional burden of making difficult decisions on behalf of someone else.

What three decisions cannot be made by a legal power of attorney?

A legal power of attorney cannot make decisions regarding the principal's personal care, such as medical treatment, unless specifically granted that authority. Additionally, a POA cannot make decisions that require the principal's consent, like altering their will or estate plan. Lastly, they cannot make decisions that violate the law or public policy. It's crucial for the principal to clearly outline the agent's powers in the POA document.

What does power of attorney give you authority over?

A power of attorney grants the agent authority to make decisions on behalf of the principal, typically regarding financial matters. This can include managing bank accounts, paying bills, and handling investments. Depending on the document's wording, the agent may also have authority over real estate transactions, tax matters, and other financial decisions. However, the scope of authority can vary, so it's important for the principal to specify the powers granted.

Does power of attorney have any financial responsibility?

Yes, a power of attorney (POA) carries financial responsibilities. The agent must manage the principal's finances honestly and in good faith, adhering to a fiduciary duty. This means they must keep accurate records of all transactions and avoid any self-dealing or conflicts of interest. If the agent mismanages funds or acts outside the authority granted, they could be held liable for any losses incurred by the principal.

What responsibility comes with power of attorney?

The primary responsibility of a power of attorney is to act in the best interest of the principal. This includes making financial decisions, managing assets, and ensuring that the principal's wishes are honored. The agent must maintain transparency and keep detailed records of all transactions. They must also avoid conflicts of interest and cannot use the principal's funds for personal gain. Failure to uphold these responsibilities can result in legal consequences.

Can POA spend your money?

Yes, a power of attorney (POA) can spend the principal's money, but only for the principal's benefit. The agent is responsible for managing the principal's finances and can pay bills, make investments, or handle other financial transactions. However, they must act within the authority granted in the POA document and cannot use the funds for personal expenses or gain. Misuse of funds can lead to legal liability.