When is a Power of Attorney Able to be Used?
Full Question:
Answer:
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.
The answer will depend on the terms of the power of attorney as to when it beocomes effective or ends, and whether the mother is mentally incapacitated. The terms of the power of attorney govern the extent of the agent's authority. A power of attorney may be limted so that it only authorizes action to be taken for a specific transaction(s) or for a specified time period. It may also state that it only becomes effective upon incapacity. In such cases, the document may state something similar to, "I shall be considered disabled or incapacitated for purposes of this power of attorney if a physician certifies in writing at a date later than the date this power of attorney is executed that, based on the physician's medical examination of me, I am mentally incapable of managing my financial affairs. I authorize the physician who examines me for this purpose to disclose my physical or mental condition to another person for purposes of this power of attorney. A third party who accepts this power of attorney is fully protected from any action taken under this power of attorney that is based on the determination made by a physician of my disability or incapacity." We suggest you read the document carefully to determine is it is still in effect. If not, it may be necessary to create a guardianship if the mother lacks mental capacity to manage her own affairs.