A power of attorney is a legal agreement that allows one adult, the agent, to make legal and financial decisions on behalf of another, the principal. As an Orange County estate lawyer, I help people create power of attorney documents so that someone of their choosing can speak for them if they should become incapacitated or otherwise unable to manage their own affairs. For example, an elderly woman (the principal) may give her adult son (the agent) power of attorney over her finances so that her bills are paid, and her retirement account is managed properly.
It may seem as if power of attorney gives the agent a lot of power over another adult. That may be a scary idea to some. Movies and television may falsely portray a power of attorney as giving one adult absolute control over another person. Hollywood, however, is often wrong about the law. While the truth doesn’t make for good drama, you can leave your fears behind here, because:
… with power comes responsibility, and there are laws against agents harming or neglecting principals. In California, agents may not harm the principal by intentionally making decisions for the principal that aren’t in the principals’ best interest. Nor can an agent be negligent. An agent is negligent when he or she is aware of a duty to act on behalf of the principal but fails to do so. For example, an agent tasked with paying the principal’s bills must actually pay the bills.
Also keep in mind that a principal has the right to revoke a power of attorney at any time. Heirs can also demand an accounting from the agent to discover how the agent used the principal’s money.
A principal may also revoke the power of attorney and sue an agent for return of misused funds and for damages, if the misuse harmed the principal. For example, say an agent has access to a principal’s bank account, and spends the money on vacations rather than the principal’s mortgage. If the house is foreclosed upon and sold, the agent may be liable for the misused funds, the value of the lost house, and the cost of getting new housing.
If you’re worried than an agent is abusing his or her power, or if you’re a principal and an agent has abused the power that you gave him or her, consult an estate lawyer here in Orange County. We can help you understand what your rights are, and help you find justice for yourself or your loved one.