You Accepted Your Role as Financial Power of Attorney Agent – Now What?

Being appointed as a Financial Power of Attorney (POA) agent is an important legal designation that grants you the authority to handle someone else’s financial affairs. Whether you were selected by a parent, spouse, or close friend, this role carries both legal and ethical responsibilities that require diligence and accountability.

If you’ve accepted this role, you may be wondering—what comes next? In Pennsylvania, POA agents must act in the best interest of the principal (the person granting the authority) and comply with specific legal requirements. Understanding your responsibilities, limits, and legal obligations will help you fulfill this role effectively and avoid potential liabilities.

Understanding Your Responsibilities as a Financial POA Agent

As an agent under a Financial POA, you are legally authorized to handle financial matters on behalf of the principal. Your specific duties will depend on the terms outlined in the POA document, but common responsibilities include:

• Managing bank accounts – Depositing or withdrawing money, monitoring balances, and handling financial transactions.

• Paying bills and expenses – Ensuring that mortgages, utilities, insurance, and other essential payments are made on time.

• Managing investments – Handling stocks, bonds, retirement accounts, or other investment assets.

• Handling taxes – Filing tax returns and ensuring tax obligations are met.

• Buying and selling property – If authorized, managing real estate transactions.

• Applying for benefits – Assisting in securing Social Security, Medicare, or other government benefits.

While these are typical duties, your powers may be limited or expanded based on the specific language in the POA document.

Pennsylvania Law and Your Legal Obligations

Under Title 20, Chapter 56 of the Pennsylvania Consolidated Statutes, POA agents have a legal obligation to:

1. Act in Good Faith – You must act in the principal’s best interest, avoiding conflicts of interest and self-dealing.

2. Maintain Accurate Records – Keep detailed records of all financial transactions, including receipts, bank statements, and correspondence.

3. Avoid Commingling Funds – You cannot mix the principal’s money with your own; all transactions must be separate and well-documented.

4. Follow the Principal’s Wishes – You must act according to the principal’s instructions unless doing so would violate the law or their best interests.

5. Act Within the Scope of Authority – You can only perform financial tasks that are explicitly authorized in the POA document.

Failure to uphold these duties could result in legal consequences, including potential civil or criminal liability if financial mismanagement or abuse occurs.

Steps to Take After Accepting Your Role

If you’ve recently been named as a Financial POA agent, follow these key steps to ensure compliance and effective management:

1. Obtain and Review the POA Document

• Carefully read the POA document to understand your exact powers and limitations.

• Verify whether the POA is immediate (effective upon signing) or springing (only effective upon incapacity).

2. Notify Financial Institutions

• Contact banks, investment firms, and creditors to inform them of your role.

• Provide them with a notarized copy of the POA document to gain access to accounts.

3. Set Up Proper Financial Management

• Open a separate financial ledger to track all transactions.

• Avoid making cash withdrawals without documented reasons.

• Keep financial records organized and transparent.

4. Understand Tax Responsibilities

• Ensure that the principal’s income taxes are filed on time.

• If necessary, consult an accountant or attorney to handle complex tax matters.

5. Communicate with the Principal and Their Family

• If possible, maintain open communication with the principal about their financial situation.

• If family members have concerns, provide transparency to avoid disputes.

6. Seek Legal or Financial Guidance if Needed

• If you encounter complex financial issues, seek advice from an estate planning attorney or financial advisor.

• If you suspect fraud, abuse, or undue influence by others, consult legal counsel immediately.

Common Pitfalls to Avoid as a POA Agent

While acting as a Financial POA agent, be mindful of the following mistakes:

❌ Mixing Personal and Principal’s Finances – Always maintain separate accounts to avoid accusations of financial mismanagement.

❌ Exceeding Your Authority – Do not make transactions or investments that are outside the scope of your authority in the POA document.

❌ Failing to Keep Records – Pennsylvania law requires you to maintain financial transparency. If questioned, you must be able to produce detailed records.

❌ Ignoring the Principal’s Wishes – Always act in the best interest of the principal, even if you personally disagree with their financial decisions.

❌ Failing to Resign if Unable to Serve – If you can no longer fulfill your duties, resign formally and ensure a successor agent (if named) can take over.

What Happens if You Misuse Your Power?

Abusing your role as a Financial POA agent can result in serious legal consequences under Pennsylvania law, including:

• Civil lawsuits from the principal or their family for financial damages.

• Criminal charges if fraud, embezzlement, or financial abuse is suspected.

• Court-ordered removal from your role as POA agent.

To avoid legal trouble, always act transparently, ethically, and within the bounds of the law.

Conclusion: Need Help? Contact Ament Law Group

Serving as a Financial POA agent is a major responsibility that requires careful financial management, strict legal compliance, and ethical decision-making. If you need guidance on handling financial matters for a loved one or have questions about your legal obligations under Pennsylvania law, we are here to help.

At Ament Law Group, we provide expert legal advice on estate planning, Power of Attorney responsibilities, and financial oversight to ensure you meet all legal requirements.

Call Ament Law Group now at (724) 733-3500 or visit www.ament.law for a consultation to ensure you fulfill your role as a POA agent correctly and legally.