Power of Attorney Obligations

by Marie Murdock
A POA agent is obliged to act in the principal's best interest.

A POA agent is obliged to act in the principal's best interest.

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A person who creates a power of attorney, known as the principal, typically appoints someone she fully and completely trusts to act as her agent, or attorney-in-fact. The authority granted under a power of attorney often allows the agent to perform actions that, absent a power of attorney, only the principal herself can perform. Therefore, the agent has a fiduciary responsibility to act for the benefit of and in the best interest of the principal.

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Scope of Duties

General powers of attorney are broad in nature, specifying the general actions an agent may perform on behalf of the principal, for example, to act on principal's behalf in all financial matters. Specific powers of attorney authorize a specific action and/or pertain to a particular event, such as selling a parcel of land or a vehicle. An agent has an obligation to the principal to act only within the powers granted by the power of attorney. Powers of attorney are governed by state law.

Transact Business

A principal usually appoints an agent to act for her because she is, or will be, unavailable or unable to act for herself. The agent has an obligation to be available and willing to act according to the principal’s instructions when needed.

Mental Incompetence

If the power of attorney is durable, it specifies that an agent may continue to act if the principal becomes mentally incompetent. Once the principal is declared incompetent, the agent may be unable to verbally confirm the principal’s instructions or intentions. Thus, she must make decisions she feels are in the best interest of the principal based on the current situation.

Resignation or Withdrawal

An agent has an obligation to the principal to withdraw if she in unable or unwilling to perform her duties in the manner expected by the principal. If illness, family emergency or other obligation prevents the agent from acting or carrying out her duties in a responsible manner, she should withdraw and allow a named alternate agent to act in her place. The withdrawing agent, however, will be responsible for turning over necessary information to the successor as well as provide notice of the withdrawal to interested parties.