A power of attorney (POA) refers to a legal document that gives authority to a principal to choose an agent to act on their behalf if they become incapacitated. The scenario happens when the principal becomes ill or gets a disability that makes them unable to sign documents. The agent has to give the principal’s interests the first priority. It is therefore vital to choose a trustworthy individual to be your agent. The question remains; can a power of attorney transfer money to themselves?
We now have to check the possibility of an untrustworthy agent transferring money to themselves if a principal gives them authority to sign documents concerning money transfers in a bank account. It is always essential to give authority to someone trustworthy, like a relative or a very close friend. A brother, a sister, or your parent can do. Many are times when principals appoint people who eventually turn against them to rob them.
Interestingly, you can revoke the power of an attorney if an agent turns against you. You have to follow the correct procedure when revoking it, and it can take some time. When revoking a power of attorney, the first step is to issue a notice/letter of revocation to the Attorney. You have to create a document called Revocation of Power of Attorney. Alternatively, you can create a new POA that indicates that the previous one is revoked.
What does a power of attorney entail?
A valid power of attorney can be typed or written. The choice remains with the principal. It must also include the date of writing and your full name. You must also state that the POA is your valid document and that you give the powers to your agent once you become unable to perform the functions that an agent should perform.
- Original passport and copies
- Valid visa copy e.g H1, H4, L1
- Copy of address proof in USA
- Original visa petition approval notice
- Two passport size photographs
- Original I-94 Form and copies
Who are the principal and agent?
It is crucial to understand who the principal and agent are. Well, if you give someone the legal powers to perform functions for you, you are the principal. The person you dedicate the duties is your agent. You should only dedicate the duties when there is an absolute need to do so.
You can make a general power of attorney or special power of attorney. When you create a general power of attorney, the agent will be responsible for your money in banks and other functions concerning your property and your authority to run various errands.
A special power of attorney gives your agent the authority to supervise your money in various banks. An agent can send money with a checking account number instantly to accounts of the same bank or to other banks by performing ACH transfers on your behalf.
Can a power of attorney transfer money to themselves?
You might be worried that a power of attorney will warrant your agent to misuse your money. Well, the answer to this question no. An agent cannot use a power of attorney to transfer money to themselves. You, as the principal, are the core division maker on what you want.
Moreover, the agent cannot pay themselves using a power of attorney. They must obtain authorization from you. You, therefore, have to make proper documentation that will allow them to withdraw a certain amount of money from your bank account. Agents are restricted to using the money in your bank account for personal expenses.
What should I do if an agent is taking money from my account?
Remember, we said that you can revoke a power of attorney. If you suspect that your agent is becoming dishonest, you can cancel the POA and write another one. You can take the following steps if you suspect that your agent is taking money from your account.
i) Prove the misuse
Every financial transaction goes into records. You can get statements for your account to show that money was channeled to the wrong recipients. Alternatively, you can request the statements of the agent account to see if they deposited money from your account.
ii) Change the scope of their authority.
If you have prepared a general power of attorney, you can revoke access to finances and leave them to other matters if they become dishonest. No one should withdraw money with my account number unless I permit them to do so. You can consult your lawyer, who can guide you through the process.
iii) Report the abuse
If an agent abuses a power of attorney, you have the right to file a case against them. You can ask your lawyer to open charges against them so that they can face the law.
What other obligations can an agent do with a power of attorney?
A power of attorney is not about finances only. There are other kinds of activities that an agent can do. They include the following.
- Dealing with property related matters, and
- Commercial or company matters
Agents can make decisions concerning property owned by the principal, such as real estate, vehicles, and lands, among others. When it comes to commercial or company matters, you can have an agent perform various kinds of activities, such as authorizing payments and exercising critical decisions on your behalf.
Which are the types of Powers of Attorney?
There are four main types of powers of attorney that you should be aware of. They include the following.
1) General Power of Attorney
The general power of attorney gives the agent-general responsibilities whereby one can open financial accounts and manage personal finances. A power of attorney can terminate when the principal becomes incapacitated, dies, or revokes the POA.
2) Durable Power of Attorney
This kind of attorney allows the agent to continue exercising even when the principal becomes incapacitated.
3) Special or Limited Power of Attorney
When an agent has a limited power of attorney, they can perform limited activities on behalf of the principal. These may include selling a house or a piece of real estate.
4) Springing Durable Power of Attorney
This kind of POA is suitable when there is an extraordinary occurrence such as when the principal becomes incapacitated.
In which ways can an agent abuse power of attorney?
Various scenarios can translate to abuse of power by an agent. These include the following.
- Not acting as per the interests of the principal.
- Transferring or selling a real estate title without permission from the principal.
- Forging the principal’s signature on essential documents.
- Taking principal’s money for personal use.
What are the cans and cant’s when drafting a power of attorney?
It is necessary to know some of the things you can do and others you cannot do when drafting a power of attorney to avoid putting yourself in complicated situations.
A power of attorney cans
- So long as you have a sound mind, you can choose whoever you want as your agent, even if they are convicted of a felony.
- You can choose a company other than an individual to be your agent for a power of attorney.
- A doctor can override power of attorney in case of emergency issues concerning your health.
- You can terminate the power of attorney if the need arises.
- Your girlfriend can become your agent. It is not a must that you choose a close relative.
- You can choose your beneficiary to be in charge of a power of attorney: e.g., your spouse.
- You can have an irrevocable power of attorney. Such people will have a lot of power and can even transfer money to someone else’s bank account but still with the principal’s permission. However, you must be extra careful about who you entrust.
- A power of attorney can pay themselves only if you allow them to do so.
- Your trustee can appoint the power of an attorney if you are not in a position to do so. A trustee can be your spouse, sibling, child, parent, or friend.
- Your power of attorney can keep your family away if you instruct them to do so.
- You can entrust more than one power of attorney.
- You can revoke a power of attorney.
- You can refuse power of attorney.
A power of attorney can’ts
The following are some of the thing’s power of attorney cannot do. Have a look.
- A durable power of attorney cannot make medical decisions.
- A power of attorney cannot override or change your living will.
- You cannot change the power of attorney if you are mentally ill.
- A power of attorney cannot borrow money without your authority
- A power of attorney cannot open a joint account unless you give authority to do so.
- A power of attorney cannot sign a will.
- A power of attorney cannot write checks, send money, withdraw cash or perform any other function. Once the principal dies, a power of attorney ends.
A power of attorney refers to a legal document that gives authority to an agent to carry out various financial, business activities, medical, among others, on behalf of the principal. You should give a power of attorney to someone you trust to avoid unauthorized activities. Most powers of attorney are revocable in case you suspect that the agent is dishonest. You can have two parties in charge of a power of attorney.