POAs & Money: Your FAQs, Answered
When you choose the individual (or multiple individuals) who will act as your Power of Attorney (POA) in the case of you needing one, chances are, you trust them. You really trust them. After all, you’re giving them the power to make decisions – both personal and financial – on your behalf.
Some of the most frequently-asked questions we hear about POA involve queries around money, paying an attorney, and what financial powers the POA actually has.
Luckily for you, we have some answers.
Do I have to pay my attorney?
Typically, a POA is a family member or close friend you’ve appointed because, well, as we’ve already mentioned: You trust them! As a result, they’ll likely be pretty honoured, and will want to do everything they can to help you when you’re unwell or dying – so, receiving payment likely won’t be something they want, need or expect.
Common practice is that the attorney is not entitled to payment for undertaking their role, and if they choose to pay themselves without seeking your permission, they’ll be in breach of their duties.
However, your loved one can be reimbursed for expenses incurred in carrying out their role as attorney. For example, if a large amount of work needs to be done, they need to miss multiple days of work, or are spending big chunks of time looking after your affairs.
Note: It’s important to seek legal advice if you’re considering paying your attorney above and beyond simply reimbursing their costs incurred.
Can a Power of Attorney transfer money to themselves?
Yes, they can, but only if it’s outlined in the original agreement or if it is clear that the POA is acting in the best interests of the individual.
Unfortunately, situations do arise where an attorney takes advantage of their legal rights – they can transfer funds beyond what was required or can choose to pay themselves a sum of money. In these cases, their powers can be revoked (which means it will be taken away, and they’ll no longer be able to make decisions on your behalf).
How much financial power does my POA actually have?
A POA exists for one reason, and one reason only: To help you make decisions (or make decisions on your behalf) when you don’t have the capacity to make them yourself. As a result, your POA will possess the power to make decisions relating to where you live, how you spend your money, the support services you might need, and more. Additionally, they’ll likely be responsible for paying your bills, taxes, and all of your providers.
Wrap up
Providing a loved one with financial power can be daunting. That’s why it’s super important to choose a family member or close friend whom you really trust. Once you’ve chosen your POA (or have decided to change your POA based on this guide, or other reasons), it’s essential you amend your POA documents to align with your decision and to ensure all the limitations, requests and requirements of your chosen POA(s) are clear.
Have you written your POA yet? Did you know you can write yours in minutes, online with Willed? Get started today!
Disclaimer: The content of this blog is intended to provide a general guide to the subject matter. This blog should not be relied upon as legal, financial, medical, accounting or tax advice.
