Duties of Agents
DUTIES OF AGENTS UNDER POWERS OF ATTORNEY
Standard of Care:
If someone is appointed as agent under a power of attorney, that person has no duty to exercise the powers granted by the agency or to assume control of or responsibility for any of the principal’s property, care or affairs, regardless of the principal’s physical or mental condition. But if the agent does elect to exercise her powers, she must use due care to act for the benefit of the principal in accordance with the terms of the agency and will be liable for any negligent exercise of her powers. If the agent adheres to this standard of care, she will not be liable merely because the agent also benefits from the act, has individual or conflicting interests in relation to the property, care or affairs of the principal or acts in a different manner with respect to the agency and the agent’s individual interests. But if the agent breaches her fiduciary duty to the principal, she may be subject to both civil and criminal penalties. Therefore, it is important to always keep the principal’s best interests in the forefront and to maintain records for all actions taken as an agent. As always, this article is meant only as a general overview, and an attorney should be consulted on the specifics of any case.
In exercising her powers, an agent must take into account the principal’s estate plan, if known, and attempt to preserve the plan. As long as the agent acts in good faith, she will not be liable to any estate plan beneficiary for her actions. Powers that might effect an estate plan include: powers of amendment or revocation and powers to expend or withdraw property passing by trust, contract or beneficiary designation at the principal’s death (i.e., specifically bequeathed property, joint accounts, life insurance, trusts and retirement plans). An agent may not revoke or amend a principal’s trust or require the trustee of any trust for the benefit of the principal to pay income or principal to the agent without specific authority and specific reference to the trust in the power of attorney. This also applies to gifts made by the agent. The agent has the right to access and copy (but not to hold) the principal’s will, trusts and other personal papers and records in order to determine and comply with the principal’s estate plan. These restrictions do not apply to Totten Trusts, Payable on Death Accounts or other trust account arrangements where the terms are contained entirely on the financial institution’s signature card.
Protection of Incapacitated Principal:
Once the principal becomes disabled, any interested person may petition the court in the case of suspected abuse. If the court finds that the agent is not acting for the benefit of the principal or that the agent’s actions or inaction have caused or threaten substantial harm to the principal’s person or property, the court may order a guardian of the principal’s person or estate to exercise any powers of the principal under the agency, including the power to revoke the agency.
An agent may also be compelled to provide a record of all receipts, disbursements and significant actions taken during the agency when requested to do so: (i) by a representative of an elder abuse agency that has received a complaint of elder abuse or neglect; (ii) by a representative of the Office of the State Long Term Care Ombudsman that has received a complaint of financial exploitation of a nursing home resident; or (iii) by a representative of the Office of Inspector General for the Department of Human Services that has received a complaint of financial exploitation of an adult with disabilities .
If the agent fails to provide her records within 21 days after a request, the agency may petition the court for an order requiring the agent to produce her records. If the court finds that the agent’s failure to provide her records in a timely manner was without good cause, it may assess reasonable costs and attorney fees against the agent and whatever other relief it deems appropriate.
To Report Elder Abuse, Neglect or Financial Exploitation:
Illinois Department on Aging:………………….. 309-938-4296
(Accepts reports of elder abuse,
neglect and financial exploitation,
and makes referrals to local
agencies throughout the State)
(Local elder abuse agency for
complaints in Peoria, Tazewell,
Woodford, Marshall, Stark and
(Local elder abuse agency for
complaints in McLean and Livingston