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.

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.

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.

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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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What Is Financial Power of Attorney Abuse?
 

References

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Power of Attorney Obligations

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.

Can a Power of Attorney Take Money?

When you give someone a power of attorney to accomplish tasks on your behalf, you make that person your agent, and his actions have the same legal authority as if you had taken those same actions. For example, if you give your agent authority to access your bank accounts, he can take money from the account. However, your agent has a legal duty to act in your best interests, so he can’t use the money for his own benefit.

Can You Admit Someone to a Nursing Home With Medical Power of Attorney?

A medical power of attorney can be used in certain circumstances to admit an individual to a nursing home. A person can appoint an agent to make medical decisions for him in case he becomes mentally incapacitated. Medical power of attorneys must be made by a person, referred to as a principal, while he is still competent. The agent accepting the appointment also must be a competent adult. Family members are frequently chosen, but it is not a requirement that a relative serve.

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