Part 1 – What are my Duties as Agent under a Power of Attorney?
When you agree to serve as an agent under a Missouri power of attorney (POA), you take on serious legal and ethical responsibilities. Missouri law, specifically RSMo Section 404.714, outlines the duties of an agent and establishes penalties for bad faith actions. Failing to act appropriately as an agent can result in significant legal and financial liability.
In this blog, we’ll explore the key duties of an agent under a Missouri POA and the potential consequences of acting in bad faith.
Duties of an Agent Under Missouri Law
1. Act in the Principal’s Best Interests
The agent must act in good faith and prioritize the interests of the principal (the person granting the POA) above their own.
Decisions must align with the principal’s expressed wishes and objectives, as outlined in the POA document.
2. Follow the Terms of the POA
The agent’s authority is limited to the powers explicitly granted in the POA document and those implied by law.
Exercising powers outside the scope of the POA is prohibited.
3. Exercise Care and Competence
Agents are expected to act with the same care, skill, and diligence that a prudent person would exercise in managing their own affairs.
4. Avoid Conflicts of Interest
Agents must avoid transactions or actions that could benefit themselves or create conflicts of interest unless expressly authorized by the principal.
5. Maintain Accurate Records
Agents should keep detailed records of all actions taken on behalf of the principal, including financial transactions, correspondence, and decisions made under the POA.
6. Provide Information Upon Request
Agents may be required to provide an accounting of their actions to the principal, the principal’s legal representatives, or a court.
7. Preserve the Principal’s Intent
Decisions made by the agent should reflect the principal’s known preferences, values, and intentions, particularly regarding healthcare, financial matters, or property management.
Part 2 – Bad Faith Actions and Potential Liability
Missouri law imposes significant penalties for agents who act in bad faith or exceed their authority under a POA. Key aspects include:
1. Definition of Bad Faith
Bad faith generally refers to intentional misconduct, dishonesty, or failure to act in the principal’s best interests. Examples of bad faith actions include:
Misusing the principal’s funds for personal gain.
Falsifying records or failing to account for financial transactions.
Acting against the principal’s known wishes.
2. Remedies for Breach of Duty
If an agent acts in bad faith, Missouri law provides several remedies:
Restitution: The agent may be required to repay any losses caused by their actions.
Civil Liability: The agent may face legal action for damages caused by their misconduct.
Revocation of Authority: The principal or a court may revoke the agent’s authority under the POA.
3. Penalties for Misconduct
Under RSMo Section 404.717, an agent who violates their duties in bad faith may be ordered to:
Compensate the principal or their estate for damages resulting from the breach.
Forfeit any financial benefits received as a result of the bad faith actions.
The court may also order the agent to pay punitive damages.
4. Criminal Liability
In severe cases, such as fraud or theft, an agent may face criminal charges in addition to civil penalties.
Part 3 – How Agents Can Protect Themselves?
1. Understand the POA Document
Read and fully understand the terms of the POA, including the limits of your authority and the principal’s wishes.
2. Act Transparently
Keep detailed records and communicate regularly with the principal or other interested parties (e.g., family members or attorneys).
3. Seek Legal Advice
If unsure about a particular decision or action, consult an attorney to ensure compliance with Missouri law.
4. Avoid Self-Dealing
Refrain from taking actions that benefit you personally unless explicitly authorized by the POA.
Conclusion
Serving as an agent under a Missouri POA is a position of trust that comes with substantial responsibilities. Under RSMo Section 404.714, agents must act in good faith, prioritize the principal’s interests, and strictly adhere to the terms of the POA. Failure to meet these obligations can result in financial, civil, and even criminal liability.
If you are considering serving as an agent or granting a POA, consult with an experienced attorney to ensure that all parties understand their rights and responsibilities under Missouri law.
For more information, visit the official Missouri Revised Statutes at https://revisor.mo.gov/main/OneSection.aspx?section=404.714
and https://revisor.mo.gov/main/OneSection.aspx?section=404.717
The preceding article is for information purposes only and is not intended to be legal advice. For help with a guardianship or conservatorship, please consult a Missouri probate attorney such as Hannam Law.