Can a Power of Attorney Charge Expenses?

By Heather Frances J.D.

When you are unable or unavailable to accomplish certain tasks, such as accessing your bank accounts, you may need an agent to act for you. A power of attorney is the document that gives your agent this authority, and it usually provides for reimbursement for reasonable expenses. State laws vary on the types of expenses for which an agent can be reimbursed, but you often can adapt these rules to fit your situation.

When you are unable or unavailable to accomplish certain tasks, such as accessing your bank accounts, you may need an agent to act for you. A power of attorney is the document that gives your agent this authority, and it usually provides for reimbursement for reasonable expenses. State laws vary on the types of expenses for which an agent can be reimbursed, but you often can adapt these rules to fit your situation.

Out-of-Pocket Expenses

Agents are generally allowed to charge the person on whose behalf they are acting – called the principal – for out-of-pocket expenses they incur while working for the principal. For example, if an agent needs to order new checks for your bank account, this expense would be reimbursable. Note that the expenses generally must be reasonable to be reimbursed.

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Default Rules

Some states have adopted laws that provide default rules regarding expenses and compensation for agents acting under powers of attorney. These rules apply to powers of attorney issued in that state unless the principal provides something different in the document. For example, Nevada law allows an agent to be reimbursed for reasonable expenses but not to receive compensation for his services. Several states have adopted versions of the Uniform Power of Attorney Act, which entitles an agent to reimbursement for reasonable expenses.

Changing the Default Rules

A principal may alter the default rules by expressing his specific wishes in the power of attorney document. For example, you could state an exact amount of compensation or specify certain expenses for which you will reimburse the agent. You can also place a monthly limit on reimbursable expenses. If your agent has access to your bank account, your power of attorney document can permit your agent to withdraw money directly from the account for his reimbursement or compensation. You can also require proof of expenses, such as receipts.

Abuse of a Power of Attorney

If you suspect that your agent is abusing his authority by charging too much, thereby violating his fiduciary responsibility as agent, you can revoke the agent's power. If you suspect someone else’s agent is abusing a power of attorney, you may be able to challenge that agent through a court action, particularly if the principal involved is not able to challenge the agent on his own. For example, if the principal is elderly and not capable of taking care of himself, you can ask the court to declare the principal to be incapacitated and appoint a guardian for the principal. The guardian can monitor the agent’s actions and make decisions for the principal. If the agent has violated any criminal laws, such as through fraud or embezzlement, you can report those crimes to legal authorities.

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Can a Power of Attorney Take Money?

References

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Laws for Power of Attorney in New Hampshire

New Hampshire financial power of attorney laws set forth the rules and limitations under which a person, known as the principal, may grant authority to another person, known as the agent, to act on their behalf. The agent acting for the principal can do whatever the principal has allowed her to do, as outlined in the power of attorney document. In New Hampshire, an agent may have broad authority that includes signing the principal's real estate deal papers and completing the principal's banking.

How Can I Prove My Uncle Is Misusing His Power of Attorney?

A power of attorney allows one person, the principal, to give authority to another person, the agent, to act on her behalf. The principal gives the authority in writing and on a document known as the power of attorney. An agent is supposed to follow the principal's directions, act in good faith and not overstep the authority the principal gives him. If your uncle is misusing his power of attorney and hurting the principal, you'll need to determine what powers he has and review your state's laws to prove it.

How to Determine a Misuse of Power of Attorney

There is a significant danger to an agent misusing his power of attorney because it may be hard to observe. The power of attorney grants the agent power to act in a principal’s name in the principal’s absence. This means that the agent might be able to transfer the principal’s property and enter the principal into binding agreements with minimal oversight by the principal. Powers of attorney are subject to state law, so rules may vary. However there is a general process you can follow to determine whether a power of attorney has been misused.

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