So someone (principal) appoints you his/her agent under a Power of Attorney (POA). You understand the basics that you have been given the authority to handle affairs on the person’s behalf but what exactly does that mean? Are you liable for anything now that you have been appointed?
Unfortunately, often individuals create POA’s and appoint their children but fail to involve the children in the process. Even more concerning is the reality that the individual never looked into what authority he/she was delegating in his/her POA. As you can imagine, this may lead to several issues for the person acting as his or her agent.
In order to protect the principal, New Jersey law states that an agent under a valid POA is a fiduciary. As a fiduciary, the agent owes the principal the duties of loyalty and care to act in the principal’s best interest. This means that when you act as an agent for someone you must be acting for his/her benefit in a way that a reasonably prudent person would act in the same situation.
In order to ensure that the agent is acting in the principal’s best interest, New Jersey imposes a duty to account on the agent. The agent must keep a record all of actions he does on behalf of the principal. This accounting can be done either formally or informally and the principal has great discretion to request whichever type of accounting they desire. If for some reason the principal suspects that the agent is not acting in his/her best interest, he can demand an accounting to review how the agent has acted on his/her behalf.
So how do you protect yourself as an agent? READ THE DOCUMENT! The state of NJ does not follow a statutory form for POA’s. This means that every POA can govern different actions. Some POA’s terminate upon the principal becoming incapacitated, others survive incapacity. Certain POA’s cover only a specific transaction like a real estate transfer, while others cover banking and investments as well. The first step any agent should take is to carefully read the document to see exactly what powers were given to the principal and for how long. If you have any specific questions, you should consult with an attorney.
When does the responsibility of an agent under a POA end? If the POA was only for a single transaction the agent’s responsibility ends at the completion of that transaction. Every POA will state when the agency terminates. Regardless, all POAs terminate at either the death of the principal or the principal’s revocation. A POA can be revoked by either the principal physically destroying the original or by the principal executing a subsequent POA that expressly revokes all prior POAs. As a law firm, we always recommend the principal notify the agent of any revocation.
Eric Goldberg is Founder and Principal of the Goldberg Law Group, LLC. He is dedicated to working with his clients on a personal level, and providing them with customized plans that meet their unique needs and goals. Over the years, Eric has learned that the best plans are the result of close collaboration, not only with his clients, but also with other professionals involved in caring for the needs of seniors, special needs adults and children, and veterans. His clients appreciate this approach and consider Eric both a counselor for life and a family friend.
Eric graduated from Cornell University with a Bachelor of Science in 1990. He earned his law degree from Yeshiva University’s Benjamin N. Cardozo School of Law in 1994. Currently, he serves on the Felician College Institute for Gerontology External Advisory Board. Eric’s extensive knowledge of the interplay between finance, tax law, and government benefits, together with his compassionate nature, make him uniquely qualified to counsel clients on the complexities of estate and long-term care planning.
Eric is part of the Essex County Bar Association, Elder Counsel, NJ State Bar Association, Financial Planning Association of New Jersey, Health Care Association of New Jersey, National Academy of Elder Law Attorneys, Executive Association of New Jersey, Vistage and The Long Term Living Association.
He is licensed in New Jersey and New York. He is also an Accredited Veterans Benefits Attorney.
When not practicing law, Eric is an avid mountain biker and snowboarder and enjoys spending time with his wife, two boys, and Golden Retriever.
At Goldberg Law Group LLC., we focus on elder law, estate planning and closely related areas of the law. Our goal is to protect everyone you love and everything you’ve earned. We provide the most effective, efficient, and client-centric elder planning strategies for our clients to avoid the financially devastating consequences of a long term healthcare need. We specialize in creating personalized solutions whether our clients wish to plan in advance of a healthcare need or are currently receiving care at home, assisted living or skilled nursing.
Our elder law attorneys take the time to get to know you personally, and gain an understanding of your current situation, greatest concerns and hopes for the future. Then we use our knowledge of the law to create and implement a plan tailored to your specific needs and designed to meet every one of them. We collaborate with other professionals, such as geriatric care managers, caregivers, financial advisors, and accountants to assist you with the multitude of concerns beyond your legal issues. Ours is a collaborative approach, and we strive to be your counselor for life, not just your attorney.
If you know of anyone having a long term care issue or a caregiver that is overwhelmed, please feel free to give them my contact information so that we may start a conversation on how we can help relieve their stress and/or concerns.
50 Tice Blvd, Suite 340
Woodcliff Lake, New Jersey 07677
IMPORTANT: This email and any attachments are for the sole use of the intended recipient(s) and contain information that may be confidential and/or legally privileged. If you have received this email in error, please notify the sender by reply email and delete the message. Any disclosure, copying, distribution or use of this communication by someone other than the intended recipient is prohibited.
Any tax advice contained in this communication, unless expressly stated otherwise, was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties that may be imposed on the taxpayer under the Internal Revenue Code or applicable state or local tax law or (ii) promoting, marketing or recommending to another party any tax-related matter(s) addressed herein.”