What power is given in a Durable Power of Attorney regarding my IRA's?
05/11/2009 - Power of Attorney - State: IL #16645
This question is about 'Durable Powers of Attorney for finances and the power he can be given regarding IRAs. My documentation says he may select payment options and possibly borrow from it. What about making withdrawals from my IRA's to pay medical bills and other bills? This is where most of my money is invested.
A power of attorney is a legal instrument that individuals create and sign that gives someone else the authority to make certain decisions and act for the signer. The person who has these powers is called an "agent" or "attorney-in-fact." The signer is the "principal." As a principal, if the principal's decisions conflict with those of the agent, the principal's decision will govern, assuming that the agent confers with the principal prior to taking an action. If an agent has acted on the principal's behalf and acted within the scope of authority granted by the power of attorney, then the principal may be obligated by the terms and conditions of his actions. The person designated to be the agent assumes certain responsibilities.
The agent is obligated to act in the principal's best interest. The agent must always follow the principal's directions. Agents are "fiduciaries," which means that the agent must act with the highest degree of good faith in behalf of their principals. The agent must keep his money separate from the principal's; keep detailed records concerning all transactions he engages in on the principal's behalf; not stand to profit by any transaction where the agent represents the principal's interests; and not make a gift or otherwise transfer any of the principal's money, personal property, or real estate to himself unless the power of attorney explicitly states he can do so. An agent who acts against the principal's interest for his own gain, or acts outside the authority granted in the power of attorney, may be held personally liable.
With a general power of attorney, the agent has broad powers to act in the principal's best interests. However, sometimes a power of attorney is limited so as to grant the agent authority to act only in certain manners, such as to handle finances or real estate transactions. It is possible to state in a limited power of attorney that the agent may not withdraw from IRA's.
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05/11/2009 - Category: Power of Attorney - State: IL #16645
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