am i financially responsible for someone who i have power of attorney over?

A definitive and short answer is no. as power of attorney you are responsible for his bills with his funds unless you caused the bills. Report Abuse Ask a Lawyer

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What are the responsibilities of a power of attorney for debt?

Jan 22, 2021 · A power of attorney (POA) is a legally binding document that lets someone else (an agent) act for you (the principal) in the event that you’re not …

Is a power of attorney responsible for someone else's bills?

If you're a cosigner, then yes, you would be responsible, but that has nothing to do with being a power of attorney. So while, as a POA, you don't need to pay the principal's bills out of your own pocket, you do have some important financial responsibilities. Through the POA, you serve as an agent and fiduciary for the principal.

Can a power of attorney make financial decisions for You?

Oct 18, 2017 · No. When someone appoints you as his/her attorney in fact (people casually refer to their title as “power of attorney”) to handle their financial affairs, you are acting as an agent to that person. You are called a fiduciary and fiduciaries must act …

What is a power of attorney and do I need one?

May 07, 2021 · In certain states, when you pass power of attorney to your living spouse, the state deems them to have equal responsibility for debts. Under these state guidelines, spousal property (both assets and liabilities) is considered communal. Liability on debt, therefore, falls on the surviving spouse. The nine states with community property laws include California, Arizona, …

Is POA liable for debt?

When it comes to debt, an agent acting under power of attorney is not liable for any debts the principal accrued before being given authority or/and any obligations outside their scope of authority.May 7, 2021

Is a power of attorney liable for debts UK?

Am I liable for the Donor's Debts? In a word, no. As an Attorney you do not act as a guarantor and should only pay debts from the Donors own resources. If the resources fall short you may have to get debt advice on their behalf.

Can a power of attorney transfer money to themselves?

Attorneys can even make payments to themselves. However, as with all other payments they must be in the best interests of the donor. ... Gifts can be on occasions such as births, marriages, birthdays, or anniversaries etc., and only to those people who are closely connected with the donor.

What does power of attorney over someone mean?

A power of attorney is a legal document that allows someone else to act on your behalf. Powers of attorney can be helpful to older people and others who want to choose a trusted person to act when they cannot.Aug 5, 2016

What are the disadvantages of power of attorney?

DisadvantagesYour loved one's competence at the time of writing the power of attorney might be questioned later.Some financial institutions require that the document be written on special forms.Some institutions may refuse to recognize a document after six months to one year.More items...

What are the disadvantages of being power of attorney?

One major downfall of a POA is the agent may act in ways or do things that the principal had not intended. There is no direct oversight of the agent's activities by anyone other than you, the principal. This can lend a hand to situations such as elder financial abuse and/or fraud.

Can power of attorney holder sell property to himself?

Answer ( 1 ) Power of Attorney is a crucial document that allows another individual who has been given the authority to sign a contract for the principal. ... If the Power of Attorney holder is following all the legal procedures then he cannot be barred by law from selling the property to himself.

What can I do when I have power of attorney?

You can give someone power of attorney to deal with all your property and financial affairs or only certain things, for example, to operate a bank account, to buy and sell property or change investments.

Can I sell my mother's house with power of attorney?

Answer: Those appointed under a Lasting Power of Attorney (LPA) can sell property on behalf the person who appointed them, provided there are no restrictions set out in the LPA. You can sell your mother's house as you and your sister were both appointed to act jointly and severally.Apr 2, 2014

What three decisions Cannot be made by a legal power of attorney?

You cannot give an attorney the power to: act in a way or make a decision that you cannot normally do yourself – for example, anything outside the law. consent to a deprivation of liberty being imposed on you, without a court order.

Can a power of attorney borrow money from the donor?

So, a property and financial Power of Attorney can give themselves money (with your best interests in mind). But you may be concerned about them borrowing money from you, or giving themselves a loan. The answer is a simple no. Your interests clearly aren't best served with someone borrowing money from your estate.Jun 18, 2021

Who can override a power of attorney?

The Principal can override either type of POA whenever they want. However, other relatives may be concerned that the Agent (in most cases a close family member like a parent, child, sibling, or spouse) is abusing their rights and responsibilities by neglecting or exploiting their loved one.Nov 3, 2019

Can you be responsible for someone else's debt?

The short and simple answer is that no, you cannot be held responsible for another person's debts. ... Debt collectors, however, sometimes will try to deceive one person into believing that they are, in fact, responsible for paying another person's debt even though that party did not sign the underlying contract.Sep 2, 2013

What are the disadvantages of power of attorney?

DisadvantagesYour loved one's competence at the time of writing the power of attorney might be questioned later.Some financial institutions require that the document be written on special forms.Some institutions may refuse to recognize a document after six months to one year.More items...

Can I be forced to pay someone elses debt?

You cannot be asked to pay for a debt that you are not linked to or liable for in any way, a court cannot order you to take liability for someone else's debt. However, there are some ways in which someone else's inability to pay their debt can impact you and the household.

Can I pay off someone else's loan?

Yes if you have the loan account number and payoff amount. Unless you are on the loan they cannot legally provide any of that information to you. Not without their permission. You'd have to know the loan number and have some sort of access to the account.

What three decisions Cannot be made by a legal power of attorney?

You cannot give an attorney the power to: act in a way or make a decision that you cannot normally do yourself – for example, anything outside the law. consent to a deprivation of liberty being imposed on you, without a court order.

Is power of attorney a good idea?

Indeed a power of attorney is vital for anyone – regardless of age – who has money and assets to protect and/or who wants someone to act in their best interest in terms of healthcare choices should they be unable to make decisions for themselves.Mar 26, 2015

Can a power of attorney transfer money to themselves?

Attorneys can even make payments to themselves. However, as with all other payments they must be in the best interests of the donor. ... Gifts can be on occasions such as births, marriages, birthdays, or anniversaries etc., and only to those people who are closely connected with the donor.

What is a power of attorney?

A power of attorney is a written contract that someone, called the principal, uses to grant another person, known as the agent or attorney-in-fact, the power to make decisions for the principal about financial and property matters. As a general rule, attorneys-in-fact are not, and cannot be, ...

When an attorney in fact uses the principal's funds to pay utility and hospital bills, what is the

When an attorney-in-fact uses the principal's funds to pay utility and hospital bills, credit card debt, student loans, or any other monetary liability, all those obligations continue to be the principal's financial responsibility. This rule applies to new debt incurred for the principal's benefit—not just debt that existed when ...

Can an attorney in fact act for their own benefit?

They do not act for their own benefit under a power of attorney or make decisions that involve their own assets and finances. For example, if the attorney-in-fact for an elderly principal suffering from dementia makes monthly mortgage payments for the principal's house from the principal's checking account, the attorney-in-fact does not by those ...

Who is liable for principal's debt?

Borrower, Cosigner, and Guarantor. Keep in mind that a person acting as an attorney-in-fact can be personally liable for a principal's debts if the attorney-in-fact has agreed to create that obligation in another legal capacity. For example, a son or daughter who is an attorney-in-fact for an elderly parent might agree to be a coborrower ...

Can an attorney in fact be a fiduciary?

Circumstances in which attorneys-in-fact can incur personal financial liability involve attorneys-in-fact breaching their fiduciary duties to the principal. Under each state's law, an attorney-in-fact must fulfill specific legal obligations known as fiduciary duties. Although the exact wording differs by state, ...

Does an attorney in fact have to repay a lender?

In other words, the attorney-in-fact does not become responsible for repaying the lender from the attorney-in-fact's personal funds if the principal runs out of money. The same rule applies to any other debt or financial obligation of the principal—whether it arose before or after the attorney-in-fact's appointment.

Can a power of attorney use a credit card?

So long as the terms of the power of attorney document do not prohibit new debt, the attorney-in-fact can use the principal's credit card to purchase the equipment and pay for it in installments from the principal's bank accounts.

What is the job of an attorney in fact?

They must. Keep good records of all transactions made on the principal’s behalf.

What is POA in banking?

Through the POA, you serve as an agent and fiduciary for the principal. That role makes you responsible for properly managing their money, assets, and debts. And that includes decisions on how to handle their debts.

What is MMI in consumer?

MMI is a member of the Consumer Federation of America (CFA), an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education.

Why does my credit score go down?

Credit score of account holder will likely plummet due to delinquencies and charge-offs. Collector may take legal action and sue account holder for defaulted debt. Account holder may have a garnishment placed against future earnings. As attorney-in-fact, you're tasked with understanding the consequences and picking the path ...

What are the duties of a principal?

They must. Act in the principal’s best interest; Manage the principal’s money and property carefully; Keep the principal’s money and property separate from their own; and. Keep good records of all transactions made on the principal’s behalf.

How to deal with debt collectors?

For the sake of the principal and yourself, make every effort to communicate your intentions with every creditor. Keep track of your communications, as well as any transactions. When handling someone else’s funds, it’s best to be as transparent as possible.

What is a POA?

A signed power of attorney (POA) gives you ability to manage the financial and legal affairs of a loved one or trusted friend. It can especially useful if you have a family member who can no longer manage their own affairs and you've been chosen to help them make decisions and handle day-to-day business. But what are your responsibilities as a POA? ...

What does it mean to be in the shoes of the principal?

That means that you stand in the shoes of the principal and all financial decisions must generally be in furtherance of that person’s heath, maintenance, education and support. However, having this “power” does not make you responsible for the principal’s debts and obligations.

Why is it important to know that nursing homes ask for a personal guarantee?

This is important to know because many times third parties will use scare tactics against an attorney in fact to collect a debt. Sometimes, nursing homes will ask the attorney in fact for a personal guarantee as a condition to the principal’s nursing home admission, which is against the law.

Can you sue a nursing home for misappropriation of assets?

To the contrary, if you use your power to transfer the principal’s assets in avoidance of debts, such as nursing home obligations, you make be subject to a lawsuit for misappropriating such assets.

Can a power of attorney be a fiduciary?

No. When someone appoints you as his/her attorney in fact (people casually refer to their title as “power of attorney”) to handle their financial affairs, you are acting as an agent to that person. You are called a fiduciary and fiduciaries must act according to certain fiduciary standards.

How does a power of attorney work?

A power of attorney is a legal document giving authority to an agent to act on behalf of the principal in the event of incapacitation. Generally, this is the person who is responsible for making decisions for you when you can't. A principal is a person who designates power of attorney, ...

What is the purpose of a power of attorney?

As you probably know, the primary purpose of a power of attorney is to act as another person's legal agent during their lifetime should they need you. But what happens when they pass away? You may be wondering if you will be responsible for any debts after the principal's death. Let's take a closer look.

What happens to a joint account when the principal dies?

Joint Accounts. If the agent and the principal hold a joint bank account, any debt remaining from the account is left under the agent's care when the principal dies. The survivor must settle any debts accrued from the account in full, regardless of who benefited from the loan. Communal Property.

Can a power of attorney be held responsible for debt?

Know When You May Be Held Responsible for Debt. When it comes to debt, an agent acting under power of attorney is not liable for any debts the principal accrued before being given authority or/and any obligations outside their scope of authority. However, it is critical to note that as an agent, you can find yourself liable for ...

Who is the executor of an estate?

The executor of the estate is usually named by the will and is bound by its provisions. Essentially, while a power of attorney represents a principal while they are alive, the executor represents the principal after death. Once appointed, the executor can only follow the instructions laid out by the will. If the deceased principal did not leave ...

What is the role of an agent in a POA?

The agent is given overall authority over the principal's finances and manages the principal’s estate and property as per the POA contract. In some cases, the agent can also access the principal's bank accounts and pay for bills and other expenses on the principal's behalf.

What happens when you give power of attorney to your spouse?

In certain states, when you pass power of attorney to your living spouse, the state deems them to have equal responsibility for debts. Under these state guidelines, spousal property (both assets and liabilities) is considered communal. Liability on debt, therefore, falls on the surviving spouse.

What to do if your mom can't tell you what she wants?

Even if your mom can't tell you what she wants, acting in her obvious best interests should keep you safe. It's also important to keep your finances separate from your mom's. With contention about money in the family, I wouldn't charge so much as a candy bar for myself on your mom's credit card.

What is your mom lucky about?

Your mom is lucky that you stopped your brother from spending more on her credit cards and leaving her with nothing to live on. Let's hope the rifts in the family can be mended and your mom can live peacefully for the rest of her life.

Can adult children check up on their expenses?

For most adult children, no one is ever going to check up on your expenditures while you're taking care of your own mother. You do the best you can and are careful not to spend money on credit that you know cannot be repaid, and all's well.

Can you sign your mom's name?

Never just sign her name.". As long as you identify yourself as your mom's agent, your credit history should not be affected and you should not be liable for the debts. DeLacy can't guarantee no one would ever try to make a case otherwise, but at least you have a leg to stand on.

Who is the person who gives you a power of attorney?

Problems of liability can blindside you and put you in a world of hurt. Before we get to that, let’s define a few terms. The person who creates and provides you with the Power of Attorney is called the “grantor”, ...

Why are you liable for a power of attorney?

Are liable because of the relationship you have with the person (and this has nothing to do with you being the “agent”). Act negligently, fraudulently or illegally. Do something that you are not authorized to do by the Power of Attorney document.

Do financial institutions honor POA?

If you present POA documents to any financial institution they usually must honor them if they are valid. You won’t need to take on other people’s liability to act as POA. At the same time, please understand that not every financial institution will consider your Power of Attorney valid.

Why is an agent a fiduciary?

Because the “agent” has a “fiduciary responsibility” to act on behalf of the grantor. That means you have to work in the best interests of the grantor and not your own. And that means if the grantor thinks (and can prove) that you acted outside your duty, she (or her heirs) can and will sue you.

What happened to the woman who was appointed as a power of attorney for her father?

Here’s what happened. Once the woman was appointed Power of Attorney for her father, she contacted her dad’s bank. The bank wouldn’t give her information on her father’s loan until she co-signed her father’s mortgage. Outrageous. The bank acted illegally of course.

What happens if a trustee doesn't complete her side of the bargain?

If the “grantor” doesn’t complete her side of the bargain, she will be held responsible, not you. This is very similar to how a trustee in a trust works and is the reason some people turn to professional trustees in certain circumstances . Sure there are some cases where creditors can come after you.

Why did the bank have to provide information to Pam?

The bank acted illegally of course. They had to provide information to Pam because she was the legal agent for her father. She didn’t need to take on any additional liability. Once this was brought to the attention of the bank, they started to behave. Be careful of tricks like this.

What is a power of attorney?

In a power of attorney, you name someone as your attorney-in-fact (or agent) to make financial decisions for you. The power gives your agent control over any assets held in your name alone. If a bank account is owned in your name alone, your attorney-in-fact will have access to it.

What happens to a power of attorney when you die?

Power of attorney dies with you. Once you pass away, the document is no longer valid and your will then controls what happens to your assets. Fund your revocable trust. If you fund your revocable trust during your lifetime, you may not need to use your power of attorney although you should still have one just in case.

When is a durable power of attorney effective?

A durable power of attorney is effective when you sign it and survives your incapacity. A springing power of attorney springs into effect when you are incapacitated. A springing power of attorney seems more attractive to most people, but it is actually harder to use.

What to do if your named agent dies before you?

Name an alternate. If your named agent dies before you or is incapacitated, you want to have a back-up who can act. Also, consider nominating a guardian and conservator in your power of attorney in case one is needed down the road. Read the document. This seems obvious, but clients often do not read their documents.

Is a power of attorney important?

People tend to focus their energies on their wills and trusts, naming someone to serve as their power of attorney at the last minute. This is an important decision and not one that should be taken lightly.

Can a financial agent access your funds?

The unfortunate answer is “yes. ”. Since he will have access to your financial accounts, he can access your funds and use them for his own benefit. The agent does have a fiduciary duty to use the assets only for your benefit or as you direct in the document.

Can a power of attorney change bank account?

Depending on the language of the power of attorney, your agent may be able to change the ownership of your bank accounts or change your beneficiary designations. This is a common scenario in second marriages.

What is a medical durable power of attorney?

A Medical Durable Power of Attorney gives one (called the attorney-in-fact) the authority to make medical decisions for the grantor if s/he is unable to make such decisions for himself/herself. Usually, it can also grant the attorney-in-fact the ability to access the grantor's accounts and assets to pay any medical bills and fees.

Is it possible to sign a power of attorney as a responsible party?

If you sign as the "responsible party" you might be. If you are simply power of attorney, and always sign in that manner there should not be an issue. Be sure to read all fine print before signing. It is possible that when you sign a form you may be agreeing to be responsible to pay. It is very important to read and understand what you are signing.

Can a power of attorney be responsible for bills?

A definitive and short answer is no. as power of attorney you are responsible for his bills with his funds unless you caused the bills. Report Abuse. Report Abuse.

Does a power of attorney create debt?

No, the purpose of a "Power of Attorney" is to allow you to do the things specified in the document. It does not create debt liability. * This will flag comments for moderators to take action. It depends on what you sign.

What is a P.O.A. paper?

Your P.O.A. papers have the words that describe your duties or actions that you can preform on the behalf of the person who granted you as Attorney in Fact. A hospital bill may be worded so that you are responsible for all debts, for another party. If you sign a form making yourself responsible you will be.

Can you sign your mother's name?

However, as POA, you can sign your mother's name, and again if I understand correctly, you mother would be responsible for the bills. Best check with the laws in your state or an attorney. This field is required. Check on the internet.... for your state laws.

Do you have to have a release from the coroner's office?

In most places now, you have to have a release from the coroner's office (and for even more fun most places do not have it such that an MD is required to be the coroner - it is an elected office) and an investigation has to be done as to cause of death. The place of death is viewed as a crime scene.

Legal Capacity of An Attorney-In-Fact

• Attorneys-in-fact act in their capacity under a power of attorneyonly as agents or representatives of the principal. They do not act for their own benefit under a power of attorney or make decisions that involve their own assets and finances. For example, if the attorney-in-fact for an elderly principal suffering from dementia makes monthly mortgage payments for the principal's …

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Breach of Fiduciary Duty

Borrower, Cosigner, and Guarantor