Durable Powers of Attorney
A Durable Power of Attorney is a written document in which a person (the principal) states that they are giving someone else (the agent) the authority to make certain decisions and to act on their behalf. The execution of a Power of Attorney does not mean the principal is not longer able to make decisions; it simply means that the agent is sharing the decision-making power with the principal.
The word "durable" means that the agent can continue to make decisions when the principal becomes incapacitated. The agent is obligated to act in the best interest of the principal; making decisions and using the principal’s money and property solely for the benefit of the principal.
The Court will place a limitation upon the agent if the agent’s duties are not specifically stated within the Power of Attorney. An agent must keep the principal’s money separate from his or her own money. He or she must not be personally involved in or stand to profit by any transaction where he or she represents the interests of the principal. And the agent is required to keep separate and accurate records regarding all transactions that he or she engages in on behalf of the principal.
Acting Appropriately As An Agent
Recent legislative changes dramatically increase the exposure of a fiduciary agent to financial liability for mismanagement of assets. The agent and the principal should know the consequences of the benefit rule and Arizona statutes dealing with financial exploitation of vulnerable adults. When accepting an appointment as an agent under a Power Of Attorney, you should proceed cautiously in order to avoid possible prosecution.
The agent is not permitted to gift or transfer any of the principal’s money, personal property, or real property to themselves, unless the Power of Attorney contains specific authority to do so. The law states that a person who is in a position of trust with an incapacitated adult, who knowingly takes control of that adult’s assets with the intent to permanently deprive that person of their assets is guilty of theft and is subject to damages in a civil suit brought by or on behalf of the incapacitated person that equal up to three (3) times the amount of the monetary damages.
If you are an agent under a Power of Attorney, and are unsure about taking an action, or if you are a principal and have questions regarding particular actions taken by your fiduciary agent, contact the Phoenix guardianship attorneys at Platt & Westby for consultation.