Generally speaking, it is a good idea for an Ohio resident to use a power of an attorney to appoint what is called an attorney-in-fact. Basically, the attorney-in-fact, or agent, has broad power to handle the person’s, called a principal’s, finances and business affairs.
The agent does not have unlimited authority to do whatever he or she wants. For example, the agent may not give away the principal’s assets to anyone or delegate the agent’s authority to someone else.
Also, the agent has to act in what is called good faith and must handle the principal’s affairs consistent with the principal’s wishes. They must also do what they can to carry out the principal’s estate plan.
If an agent does not meet these important responsibilities, family members and other interested parties may attempt to create a guardianship or otherwise replace the attorney-in-fact.
They also may attempt to recover funds from the attorney-in-fact and ask for penalties, attorney fees and other consequences.
An attorney-in-fact does not have to be dishonest to be liable
These legal consequences can apply to agents who act dishonestly. Unfortunately, even with careful diligence, sometimes a Dayton resident will mis-judge the trustworthiness of a friend or relative and appoint him or her an attorney-in-fact.
In these cases, if the agent misuses funds, a civil lawsuit or other legal action might be the best option for a family.
However, an attorney-in-fact does not have to be dishonest in order to face legal liability. Carelessness with a principal’s accounts or other negligence can also be grounds for a family to take legal action.
This does not mean that an attorney-in-fact’s decisions have to be perfect or that a family always has to agree with them. Still, an Ohio family which is concerned that an agent is using a power of attorney to squander money should evaluate its legal options.