Takeaways
Takeaways- As an agent under a power of attorney, you are a fiduciary and must act in the principal’s best interest.
- Your authority comes from the legal document — you can only do what the power of attorney allows while in accordance with state law.
- Good records and separate accounts are your best protection against misunderstandings and legal trouble.
- A power of attorney typically ends at death, and agent authority is different from being an executor or trustee.
Being named someone’s agent (sometimes called an “attorney-in-fact”) under a power of attorney can feel like an honor — and a lot of pressure. A financial power of attorney lets you handle certain money and property matters for the person who signed it (the “principal”).
If you’ve just stepped into this role, it helps to understand (1) what you’re allowed to do, (2) what you must do, and (3) what you should avoid.
Below are nine common questions people ask about being an agent under a power of attorney.
1) What are my duties as an agent under a power of attorney?
Your job is to act for the principal on the financial matters the document authorizes. Depending on the type of power of attorney (POA) and how the document is written, that can include things like paying bills, managing bank accounts, signing contracts, handling insurance issues, and dealing with investments.
Two practical rules can help keep you on track:
- Follow the document. If the power of attorney doesn’t grant a power (for example, making gifts or changing beneficiary designations), don’t assume you can do it.
- Act like a careful, honest steward. You’re handling someone else’s money — treat it at least as carefully as you would treat your own.
2) What does it mean to be a “fiduciary”?
A fiduciary is someone who must act with loyalty, honesty, and care for another person’s benefit.
As an agent, that usually means:
- Acting in the principal’s best interest (not yours)
- Avoiding conflicts of interest
- Keeping the principal’s money separate from your own
- Keeping good records
- Following any instructions in the power of attorney
This role is not the same as being a trustee or executor. A trustee manages trust property under the trust terms, and an executor (personal representative) manages an estate after someone dies. A power of attorney is generally used during the principal’s lifetime.
3) Can I be held personally liable for my actions as agent?
Potentially, yes.
In many states, an agent can be held responsible for losses caused by violating fiduciary duties — for example, self-dealing, misusing funds, failing to follow the document, or keeping poor records that make transactions impossible to explain.
That said, being an agent does not automatically make you personally responsible for the principal’s bills or debts. Your role is to manage the principal’s finances using the principal’s funds — not to pay out of your own pocket.
If you’re in a situation where someone is pressuring you to sign in a way that could create personal liability, it can help to speak with an estate planning attorney before you act.
4) When does a power of attorney take effect?
It depends on how the document is written.
- Some powers of attorney are effective immediately after signing.
- Others are “springing,” meaning they only become effective after a specific event happens (often the principal’s incapacity, usually proven in the way the document requires).
If the document is effective immediately, the principal may still expect you to wait to use it unless you’re needed. The safest approach is a clear conversation with the principal (while the principal has capacity) about when you should step in.
5) What if there is more than one agent?
Co-agents can be set up to act:
- Independently (either agent can act alone), or
- Together (agents must agree and sign/act jointly), or
- In a mixed arrangement (for example, independent for routine banking but joint for selling real estate).
What matters is the wording of the document.
Even if you can act independently, coordination is smart. Miscommunication between co-agents can lead to duplicated payments, contradictory investment decisions, or conflict with banks and financial institutions.
6) Can the principal “fire” me or revoke the power of attorney?
Yes. As long as the principal has the legal capacity to do so, the principal can revoke the power of attorney (and your authority) at any time.
Also, depending on the situation and state law, a court-appointed guardian or conservator may have the power to revoke or limit an existing power of attorney.
7) What records should I keep as an agent?
Good recordkeeping protects the principal and protects you.
At minimum, keep:
- A list of accounts you manage
- Statements and invoices
- Receipts for purchases
- A log of major actions (for example, “Paid property taxes,” “Canceled auto insurance,” “Sold investments to cover care costs”)
Two best practices:
- Keep money separate. Don’t mix the principal’s funds with yours (“commingling”), even temporarily.
- Make the paper trail easy to follow. Many agents run transactions through a dedicated checking account so there’s a clear, chronological record.
If you’re unsure how long you’ll need documentation, err on the side of keeping records longer rather than shorter.
8) Can I resign, and can I be paid for being an agent?
Yes — but the details matter.
- Resigning: Many states allow an agent to resign, but you typically need to give notice (and you may need to provide records and help with a transition).
- Compensation: Some documents allow compensation, and state law often permits “reasonable” compensation unless the power of attorney says otherwise. If you expect to be paid, it’s best to discuss it early and keep the arrangement in writing.
9) What if a bank or other institution refuses to accept the power of attorney?
This happens more often than people expect, especially if the document is older or the institution has its own internal review process.
Practical steps that usually help:
- Ask what, specifically, they need. Some banks want the POA reviewed by their legal department, a certification/affidavit, or an “agent’s acknowledgment.”
- Confirm you’re presenting the right version. Institutions often want a clear copy of the full document (all pages) and may require a certified copy if it’s been recorded.
- Check whether the POA grants the power you’re trying to use. For example, authority to access certain accounts, handle retirement plan transactions, or deal with real estate may need to be explicitly stated.
- Escalate politely. If a front-line employee says “we don’t accept POAs,” ask for a supervisor or the legal/compliance department.
If you’re blocked and time matters (for example, bills are going unpaid or care costs are due), an elder law or estate planning attorney can help you respond in a way that aligns with your state’s rules and the institution’s requirements.
A Final Caution: A Power of Attorney Ends at Death
A common point of confusion is what happens after the principal dies. In general, a power of attorney ends at death, and the person in charge becomes the executor named in a will or appointed by a court.
If you are worried about doing the right thing — or you’re facing family conflict, questions about gifting, or possible accusations — it can be wise to get guidance from Ashley Day Law, LLC before you act.