Does a Power of Attorney make you responsible for another's debt?

Full Question:

My son's partner (not legal) was suddenly became seriously ill in NYC while attending school there. (They are California residents) The partner is unable to attend to his financial matters and my son got a power of attorney to pay his bills etc. What are my son's liabilities? Is he responsible for any bills prior to the onset of illness or any bills regarding medical treatment?
05/29/2009   |   Category: Power of Attorney   |   State: California   |   #16815


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. If an agent acts within his authority in the agent's best interest, the agent won't be personally liable for debts unless the agent has a separate agreement, such as a co-signer agreement, in regard to the debt.

If the agent has authority for financial matters, bills owed, such as medical expenses, should be paid by the agent if the principal is unable. The agent may also raise any defenses or offsets against creditors' claims.

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