Duties of an agent under a general durable power of attorney

as an agent under a General Durable Power of Attorney, now what? Most people are familiar with what a Durable Financial Power of Attorney is; however, if you are named as an agent for someone you may be unsure as to what this entails. Acting as an agent under a Power of Attorney is a very important role. As an agent you step into the shoes of the Principal (the person that created the POA) and can act on their behalf with regard to various financial and legal transactions. It is key to always be mindful that the assets of the principal are not your assets and you must safeguard the assets of the Principal.

It is important to know when the POA becomes effective. Most POAs become effective when signed by both the principal and the agent. However, some POA documents do not become effective until the incapacity of the principal. If the POA that you are named agent under, is effective immediately, it is important to ascertain the wishes of the principal. Most individuals do not intend for the agent to begin acting on their behalf under the POA until the principal becomes incapable of handling their own affairs. Therefore, it is important to discuss with the principal what their intentions are.

As a practical matter, once you do need to begin acting under the POA on behalf of the principal, the POA document will need to be provided to the various financial institutions. Often the financial institutions will require the original document to be brought for their review, and then copied. There can be a review or wait period whereby the financial intuition needs their legal or compliance department to review and approve the document prior to you beginning to transact on the account. This process can cause delays; therefore, it can be advisable (with the principal’s permission) to have the document placed on file with the financial institutions prior to needing to transact on the account.

An agent under a POA is charged with acting in the principal’s best interests. There are some duties that are obvious, such as the duty to not use the principal’s assets on your own behalf (unless the document specifically authorizes this). As well as the duty not to comingle your assets with the assets of the principal. However, there are other obligations that you may be less familiar with. For example, the agent should keep careful records. Keeping careful records of all of the agent’s actions is important. If a question arises as to whether the agent acted properly, having the records to show or clarify the financial transaction is key to preventing liability. The agent must be careful to follow the instructions of the principal as documented in the POA. An agent is charged with acting in good faith, in accordance with the principal’s best interest, and acting with prudence when carrying out the financial affairs of the principal. If the agent acts wrongfully and contrary to the wishes of the principal, the agent can be held liable in court for breach of fiduciary duties.

Acting as an agent under a POA is a very important role. It can be time consuming and overwhelming at times. Do not be afraid to seek professional assistance in your duties as an agent. This could entail hiring a financial advisor, CPA, attorney, etc. to assist you with the various tasks that you are charged with.

Rebecca A. Hobbs, Esquire is licensed to practice in the Commonwealth of Pennsylvania and is certified as an Elder Law Attorney by the National Elder Law Foundation as authorized by the Pennsylvania Supreme Court. She is a principal of the law firm of O’Donnell, Weiss & Mattei, P.C., 41 High Street, Pottstown, and 347 Bridge Street, Phoenixville,610-323-2800, www. owmlaw.com. You can reach Ms. Hobbs at rhobbs@owmlaw.com