By Dan Barney
Everyone is familiar with the benefits of naming someone to act in your behalf. This delegation of authority can occur while you are living or you may give authority to someone to carry out your wishes after your death.
If asked to act as an agent for someone else, are you familiar with the duties that you owe to that person?
You have a “fiduciary duty” to the principal to properly represent that person.
Some positions that impose a fiduciary duty on you include the following:
A. Health care agent under a power of attorney
B. Attorney in fact under a power of attorney
C. Trustee of a trust
D. Personal representative in probate
E. An agent for a company, partnership, etc.
A person assumes duty to another when they accept their position as agent.
When acting in these capacities, you are subject to formal review, audit and accounting for your actions. Often this accountability is not limited to initiation only by the principal.
An accounting of your actions can also be initiated by the court at the request of persons who can directly be affected by the actions of the fiduciary.
Thus, beneficiaries under a trust, heirs, devisees in an estate, partners in a partnership, shareholders in a company do have a right to question and receive accounting of the actions of a fiduciary.
Guardians also are held to a duty and are required to provide a written plan for the care and maintenance of the person and also an accounting of their actions regarding the care and maintenance of their “Ward.”
Also a financial accounting of their resource management must be submitted for court review on an annual basis or upon the termination of the guardianship.
Financial abuse is the most common concern regarding the breach of fiduciary duty. This could involve misapplication of funds, self-dealing of funds, transfer of assets to favor certain persons, etc.
For health care agents, a breach of duty may include neglect, failure to obtain proper care or general failure to properly provide for the welfare of the person.
Because these two areas are the most common source of breach, the law provides specific penalties based upon the injury resulting from the action by the fiduciary.
Next week, a discussion of what duties does an agent owe to the person or persons appointing them as agent.