Wednesday, March 15, 2017

Fair Compensation for Power of Attorney Agents

Many people wonder if they are entitled to be paid for serving as an agent under a Power of Attorney.  Generally, an agent is entitled to reasonable compensation, but as AgingCare.com clarifies, “Regardless of how much time and effort has been spent by the POA… the only way she is entitled to financial compensation is if it is written in the original POA document…No one has any right to make decisions to pay a salary to the POA except your mother.”

A durable power of attorney document appoints someone to act in your place if you are incapacitated.  The POA is allowed to take whatever investment and spending measures which he or she believes the principal (you) would take on your own behalf, including:
  • opening accounts
  • withdrawing funds from accounts
  • trading stock
  • paying bills
  • cashing checks
  • selling assets
  • buying assets
A person acting as a POA agent is a fiduciary, meaning he or she is held to the highest standards of good faith, fair dealing, and loyalty, always acting according to the goals and wishes of the person who appointed them in the first place.

In most cases, a POA agent is a family member who does not expect to be paid at all. But, if the principal agrees to pay the agent, that should be agreed upon ahead of time and put into the document itself.

The Consumer Financial Protection Bureau, which has a special federal Office for Older Americans, published the very useful handbook “Help for Agents Under a Power of Attorney”.

On our Geyer Law website, we emphasize how central a role your General Durable Power of Attorney plays in your estate planning. “Without a Power of Attorney in place, your family’s only option is to obtain a legal guardianship over you to handle financial affairs in the event of your incapacity.”

You may or may not choose to provide “reasonable compensation” to your Power of Attorney Agent, but the Power of Attorney document itself – that’s a priceless piece of your estate plan!

- by Rebecca W. Geyer

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