What are some financial considerations of power of attorney?
- Does a power-of-attorney agent get paid?
The person giving the power of attorney decides whether the agent is to be paid. If the job is simple and is handled by a close family member, payment is not usually made, although he could choose to do so. If the job is likely to be complicated and time-consuming, or is to be handled by someone who isn't a close relative, then the agent should be paid on an hourly basis. In either case, the agent may reimburse himself for reasonable expenses.
- Is a power-of-attorney agent personally liable for the person's financial losses?
Some people may be reluctant to take on the job of power-of-attorney agent because they fear legal liability -- meaning personal responsibility -- if their financial dealings result in losses. The general legal rule, though, is that an agent isn't personally responsible for financial losses unless he committed theft or other fraud, neglected normal duties (repeatedly failed to pay rent on time, for example), or made a "reckless" decision that resulted in a substantial loss (legally, "reckless" means an intentional disregard of obvious high risk, not just poor judgment).