No. When someone appoints you as his/her attorney in fact (people casually refer to their title as “power of attorney”) to handle their financial affairs, you are acting as an agent to that person. You are called a fiduciary and fiduciaries must act according to certain fiduciary standards. For instance, a fiduciary must act in the best interests of the principal (the person who appointed you). That means that you stand in the shoes of the principal and all financial decisions must generally be in furtherance of that person’s heath, maintenance, education and support.
However, having this “power” does not make you responsible for the principal’s debts and obligations. This is important to know because many times third parties will use scare tactics against an attorney in fact to collect a debt. Sometimes, nursing homes will ask the attorney in fact for a personal guarantee as a condition to the principal’s nursing home admission, which is against the law.
To the contrary, if you use your power to transfer the principal’s assets in avoidance of debts, such as nursing home obligations, you make be subject to a lawsuit for misappropriating such assets.
A properly drafted power of attorney is one of the most important documents in your arsenal of estate and elder law planning documents. One of the problems seen every week in our office is the use of boilerplate powers of attorney obtained from the internet or non-elder law attorneys. Using these documents could be very detrimental and costly to your family.
