In previous posts, the importance of having a Power of Attorney has been discussed (see Maggie Green‘s “The Power of Attorney In Real Life” and my post “Powers of Attorney: The Basics”). In general, the document is a good one to have while you are alive to ensure that important documents and other financial matters can be handled by an attorney-in-fact of your choosing, when you are unavailable or incompetent to handle the matters yourself.
Keeping Records
Many often ask what the specifics duties of an attorney-in-fact are. In general, an attorney-in-fact must keep complete records of all transactions entered into by the attorney-in-fact on behalf of the principal (you). Oftentimes, on the Power of Attorney document, you can state whether the attorney-in-fact must have a duty to provide an accounting of any transactions. Or, if you simply make a request for an accounting at the time of the transaction. Additionally, an accounting will be required by law, if the attorney-in-fact reimburses him or herself for any expenditure the attorney-in-fact made on behalf of the principal. In general, a written statement that gives reasonable notice of all transactions entered into by the attorney-in-fact on behalf of the principal will be considered an adequate accounting.
Examination of Records
The persons entitled to examine and copy the records of the attorney-in-fact are the principal, a person designated by the principal in the document creating the power of attorney as the recipient of accountings required by the section, and the guardian or conservator of the estate of the principal while the principal is living and the personal representative of the estate of the principal after the death of the principal.
No Affirmative Duty, but…
The attorney-in-fact has no affirmative duty to exercise any power conferred upon the attorney-in-fact under the power of attorney. In exercising any power conferred by the power of attorney, the attorney-in-fact should exercise the power in the same manner as an ordinarily prudent person of discretion and intelligence would exercise in the management of the person’s own affairs and should have the interests of the principal utmost in mind.
Liability
The attorney-in-fact is personally liable to any person, including the principal, who is injured by an action taken by the attorney-in-fact in bad faith under the power of attorney or by the attorney-in-fact’s failure to account when the attorney-in-fact has a duty to account under this section.
Should you have any questions about your Power of Attorney or if you are in need of a Power of Attorney, be sure to contact an estate planning attorney in your area.
