Can a Power of Attorney Take Money?

By Heather Frances J.D.

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.

Types of Powers of Attorney

Powers of attorney that give financial authority to your agent can be general or limited. A general power of attorney gives your agent broad authority to perform many tasks on your behalf. A limited power of attorney only gives your agent power to do one or two limited things for you. For example, you can give your agent power to access one specific bank account or all of your accounts. Regardless of the type of power of attorney, your agent has the same responsibility to act in your best interests.

Authority

Your agent is not allowed to exercise any authority – financial or otherwise – beyond what you assigned to him in the power-of-attorney document. If you didn’t give him authority to take money, he cannot do so. If you did give him authority to take money, he must only take the money for your benefit, not his own.

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Expenses

Agents are generally allowed to reimburse themselves – or receive reimbursement from you – for out-of-pocket expenses they incur while acting on your behalf. These expenses usually must be considered reasonable, and you can place a limit on the amount or type of expenses for which your agent may receive reimbursement. You can also require your agent to provide proof of his expenditures, such as receipts.

Abuse of Authority

If your agent has acted outside of his authority or on his own behalf, you can withdraw the power of attorney, thereby removing his authority to act for you; you also may be able to sue the agent to recover any money he may have taken. If you suspect an agent is stealing from a principal by abusing the authority granted to him under a power of attorney, you may wish to file a lawsuit on the principal’s behalf. Sometimes, an agent’s abuse of authority may constitute crimes such as forgery, larceny or fraud. If so, your local law enforcement agency may be able to help.

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What Is Financial Power of Attorney Abuse?
 

References

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What Are the Disadvantages of Using a Power of Attorney?

While a power of attorney can be useful, you should consider some of the disadvantages of giving another person authority to act on your behalf. Giving power of attorney to a person you trust allows her to engage in actions and complete transactions for you. Your agent may do whatever you authorize her to do through your power of attorney document, including your banking transactions.

How to Grant a Power of Attorney

A power of attorney is a legal document in which a person, known as the principal, authorizes legal authority to another, known as the agent, of attorney-in-fact. The function of a power of attorney is to allow the agent to perform legal acts, such as signing a tax return or consenting to medical treatment, on behalf of the principal. Many institutions, such as banks and hospitals, offer fill-in-the-blanks power of attorney forms; some state government websites offer forms for free download. You may draft your own form if you can't find a fill-in-the-blank form that meets your particular needs.

Risks of a Financial Power of Attorney

Giving someone power of attorney over your financial affairs can be frightening, especially if the reason you need the power of attorney is because you have been incapacitated in some way. Having unsupervised access to money can bring out the worst instincts in some people, but if you choose your agent carefully, having a trusted individual to act as an agent on your behalf can be a huge help.

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