Can an Agent in a Power of Attorney Disobey the Wishes of the Principal?
Full Question:
Answer:
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. In order to disobey the instructions of the principal, court approval must be obtained. 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.
Fiduciaries owe two main duties to their clients: a duty of loyalty and a duty of care. The duty of loyalty requires that fiduciaries act solely in the interest of their clients, rather than in their own interest. Thus fiduciaries must not derive any direct or indirect profit from their position, and must avoid potential conflicts of interest. The duty of care requires that fiduciaries perform their functions with a high level of competence and thoroughness, in accordance with industry standards.
In order to revoke, cancel, or end a power of attorney before it expires, the principal must sign a revocation of power of attorney and give a copy of the revocation to any person who might have or will possibly deal with the agent.
Please see the following CA statutes to determine applicability:
4540. Subject to Section 4503, a petition may be filed under this
part by any of the following persons:
(a) The attorney-in-fact.
(b) The principal.
(c) The spouse of the principal.
(d) A relative of the principal.
(e) The conservator of the person or estate of the principal.
(f) The court investigator, described in Section 1454, of the
county where the power of attorney was executed or where the
principal resides.
(g) The public guardian of the county where the power of attorney
was executed or where the principal resides.
(h) The personal representative or trustee of the principal's
estate.
(i) The principal's successor in interest.
(j) A person who is requested in writing by an attorney-in-fact to
take action.
(k) Any other interested person or friend of the principal.
4541. A petition may be filed under this part for any one or more
of the following purposes:
(a) Determining whether the power of attorney is in effect or has
terminated.
(b) Passing on the acts or proposed acts of the attorney-in-fact,
including approval of authority to disobey the principal's
instructions pursuant to subdivision (b) of Section 4234.
(c) Compelling the attorney-in-fact to submit the attorney-in-fact'
s accounts or report the attorney-in-fact's acts as attorney-in-fact
to the principal, the spouse of the principal, the conservator of the
person or the estate of the principal, or to any other person
required by the court in its discretion, if the attorney-in-fact has
failed to submit an accounting or report within 60 days after written
request from the person filing the petition.
(d) Declaring that the authority of the attorney-in-fact is
revoked on a determination by the court of all of the following:
(1) The attorney-in-fact has violated or is unfit to perform the
fiduciary duties under the power of attorney.
(2) At the time of the determination by the court, the principal
lacks the capacity to give or to revoke a power of attorney.
(3) The revocation of the attorney-in-fact's authority is in the
best interest of the principal or the principal's estate.
(e) Approving the resignation of the attorney-in-fact:
(1) If the attorney-in-fact is subject to a duty to act under
Section 4230, the court may approve the resignation, subject to any
orders the court determines are necessary to protect the principal's
interests.
(2) If the attorney-in-fact is not subject to a duty to act under
Section 4230, the court shall approve the resignation, subject to the
court's discretion to require the attorney-in-fact to give notice to
other interested persons.
(f) Compelling a third person to honor the authority of an
attorney-in-fact.
4542. A proceeding under this part is commenced by filing a
petition stating facts showing that the petition is authorized under
this part, the grounds of the petition, and, if known to the
petitioner, the terms of the power of attorney.
4543. The court may dismiss a petition if it appears that the
proceeding is not reasonably necessary for the protection of the
interests of the principal or the principal's estate and shall stay
or dismiss the proceeding in whole or in part when required by
Section 410.30 of the Code of Civil Procedure.
4544. (a) Subject to subdivision (b), at least 15 days before the
time set for hearing, the petitioner shall serve notice of the time
and place of the hearing, together with a copy of the petition, on
the following:
(1) The attorney-in-fact if not the petitioner.
(2) The principal if not the petitioner.
(b) In the case of a petition to compel a third person to honor
the authority of an attorney-in-fact, notice of the time and place of
the hearing, together with a copy of the petition, shall be served
on the third person in the manner provided in Chapter 4 (commencing
with Section 413.10) of Title 5 of Part 2 of the Code of Civil
Procedure.
4545. In a proceeding under this part commenced by the filing of a
petition by a person other than the attorney-in-fact, the court may
in its discretion award reasonable attorney's fees to one of the
following:
(a) The attorney-in-fact, if the court determines that the
proceeding was commenced without any reasonable cause.
(b) The person commencing the proceeding, if the court determines
that the attorney-in-fact has clearly violated the fiduciary duties
under the power of attorney or has failed without any reasonable
cause or justification to submit accounts or report acts to the
principal or conservator of the estate or of the person, as the case
may be, after written request from the principal or conservator.
4232. (a) An attorney-in-fact has a duty to act solely in the
interest of the principal and to avoid conflicts of interest.
(b) An attorney-in-fact is not in violation of the duty provided
in subdivision (a) solely because the attorney-in-fact also benefits
from acting for the principal, has conflicting interests in relation
to the property, care, or affairs of the principal, or acts in an
inconsistent manner regarding the respective interests of the
principal and the attorney-in-fact.
4233. (a) The attorney-in-fact shall keep the principal's property
separate and distinct from other property in a manner adequate to
identify the property clearly as belonging to the principal.
(b) An attorney-in-fact holding property for a principal complies
with subdivision (a) if the property is held in the name of the
principal or in the name of the attorney-in-fact as attorney-in-fact
for the principal.
4234. (a) To the extent reasonably practicable under the
circumstances, an attorney-in-fact has a duty to keep in regular
contact with the principal, to communicate with the principal, and to
follow the instructions of the principal.
(b) With court approval, the attorney-in-fact may disobey
instructions of the principal.
4235. If the principal becomes wholly or partially incapacitated,
or if there is a question concerning the capacity of the principal to
give instructions to and supervise the attorney-in-fact, the
attorney-in-fact may consult with a person previously designated by
the principal for this purpose, and may also consult with and obtain
information needed to carry out the attorney-in-fact's duties from
the principal's spouse, physician, attorney, accountant, a member of
the principal's family, or other person, business entity, or
government agency with respect to matters to be undertaken on the
principal's behalf and affecting the principal's personal affairs,
welfare, family, property, and business interests. A person from
whom information is requested shall disclose relevant information to
the attorney-in-fact. Disclosure under this section is not a waiver
of any privilege that may apply to the information disclosed.
4151. (a) A principal may revoke a power of attorney as follows:
(1) In accordance with the terms of the power of attorney.
(2) By a writing. This paragraph is not subject to limitation in
the power of attorney.
(b) An attorney-in-fact or third person who does not have notice
of the revocation is protected from liability as provided in Chapter
5 (commencing with Section 4300).
4152. (a) Subject to subdivision (b), the authority of an
attorney-in-fact under a power of attorney is terminated by any of
the following events:
(1) In accordance with the terms of the power of attorney.
(2) Extinction of the subject or fulfillment of the purpose of the
power of attorney.
(3) Revocation of the attorney-in-fact's authority, as provided in
Section 4153.
(4) Death of the principal, except as to specific authority
permitted by statute to be exercised after the principal's death.
(5) Removal of the attorney-in-fact.
(6) Resignation of the attorney-in-fact.
(7) Incapacity of the attorney-in-fact, except that a temporary
incapacity suspends the attorney-in-fact's authority only during the
period of the incapacity.
(8) Dissolution or annulment of the marriage of the
attorney-in-fact and principal, as provided in Section 4154.
(9) Death of the attorney-in-fact.
(b) An attorney-in-fact or third person who does not have notice
of an event that terminates the power of attorney or the authority of
an attorney-in-fact is protected from liability as provided in
Chapter 5 (commencing with Section 4300).
4153. (a) The authority of an attorney-in-fact under a power of
attorney may be revoked as follows:
(1) In accordance with the terms of the power of attorney.
(2) Where the principal informs the attorney-in-fact orally or in
writing that the attorney-in-fact's authority is revoked or when and
under what circumstances it is revoked. This paragraph is not
subject to limitation in the power of attorney.
(3) Where the principal's legal representative, with approval of
the court as provided in Section 4206, informs the attorney-in-fact
in writing that the attorney-in-fact's authority is revoked or when
and under what circumstances it is revoked. This paragraph is not
subject to limitation in the power of attorney.
(b) An attorney-in-fact or third person who does not have notice
of the revocation is protected from liability as provided in Chapter
5 (commencing with Section 4300).
4154. (a) If after executing a power of attorney the principal's
marriage to the attorney-in-fact is dissolved or annulled, the
principal's designation of the former spouse as an attorney-in-fact
is revoked.
(b) If the attorney-in-fact's authority is revoked solely by
subdivision (a), it is revived by the principal's remarriage to the
attorney-in-fact.
4155. (a) Subject to subdivision (b), the authority of an
attorney-in-fact under a nondurable power of attorney is terminated
by the incapacity of the principal to contract.
(b) An attorney-in-fact or third person who does not have notice
of the incapacity of the principal is protected from liability as
provided in Chapter 5 (commencing with Section 4300).
(c) This section is not subject to limitation in the power of
attorney.