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If I serve as agent under a financial power of attorney, am I personally responsible for debts?

Question:

If I have power of attorney for someone, can I be held responsible for that person's debts in the event of death?

Answer:

When someone creates a power of attorney (POA) and names you as the agent (sometimes also called "attorney-in-fact"), you should not be held liable for that person's debts or other financial troubles unless those difficulties result from dishonest or grossly irresponsible acts on your part.

As long as you are scrupulously honest, careful with the person's money, and faithful to the instructions given to you in the power-of-attorney document, you take on little legal risk when you agree to serve as an agent for the person making the POA (called a "principal").

That said, you might be liable for the principal's debts not because you're the agent, but because of some other relationship you hold with the person. For example, you might be responsible for someone's debts if:

  • you're the person's spouse or registered domestic partner, in some states
  • you co-signed a loan
  • you're a co-owner of an account or other property.

Also, you should know that your job as agent or attorney-in-fact ends when the principal dies. At that point, the executor (or "personal representative" or "administrator") steps in to wind up the deceased person's affairs. If there are debts to be paid, the executor will pay them out of the deceased person's assets. Of course, if you were jointly responsible for the debts to begin with—for example, because you are married to the principal and you took on the debts together—you will have to pay.

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