Do power of attorneys get paid
Yes, a person appointed under a power of attorney may be paid, but payment is not automatic. The answer depends on 3 things: the power of attorney document, the law of the relevant state, and whether the payment is reasonable.
In the United States, the appointed person is usually called the agent or attorney-in-fact. "Attorney-in-fact" does not mean the person is a lawyer.
Power of Attorney Payment at a Glance
| Question | General answer |
|---|---|
| Can a power of attorney agent be paid? | Yes, in some circumstances |
| Are reasonable expenses reimbursed? | Often, when they were incurred for the principal |
| Is compensation automatic? | No. The document or state law controls |
| Is there a standard fee? | No nationwide fee exists |
| Can a family member be paid? | Sometimes, depending on the document and state law |
| Can payment be prohibited? | Yes. The document can state that the agent receives no compensation |
When Can a Power of Attorney Agent Receive Payment?
An agent may receive compensation when:
- The power of attorney authorizes payment.
- State law allows reasonable compensation.
- The amount is reasonable for the work performed.
- The agent keeps suitable records and acts in the principal's best interests.
The Uniform Power of Attorney Act provides a default rule allowing an agent to receive reimbursement for reasonable expenses and reasonable compensation unless the power of attorney says otherwise.
The rule differs by state. For example:
- Texas generally allows an agent to receive reasonable compensation and reimbursement for reasonable expenses unless the power of attorney says otherwise.
- New York generally does not allow an agent to receive compensation from the principal's assets unless the power of attorney specifically authorizes it. New York does allow reimbursement for reasonable expenses.
The document and the law of the relevant state both matter.
Are Power of Attorney Agents Reimbursed for Expenses?
Usually, an agent can be reimbursed for reasonable expenses incurred on the principal's behalf. Examples include:
- Mileage and transportation
- Postage and copying
- Bank and administrative fees
- Professional services obtained for the principal
- Repairs and other expenses related to the principal's property
- Necessary travel to manage the principal's affairs
Reimbursement is different from compensation. Reimbursement repays money the agent spent for the principal. Compensation pays the agent for performing services.
The agent should keep receipts, invoices, mileage records and notes explaining why each expense was necessary.
How Much Can a Power of Attorney Agent Be Paid?
There is no universal hourly rate or percentage for power of attorney agents in the United States.
The payment may be:
- A specific dollar amount
- An hourly rate
- A monthly payment
- A one-time fee
- An amount determined after the work is completed
If the document does not set an amount, a court may consider:
- The time required
- The complexity of the principal's financial affairs
- The agent's responsibilities
- The value of the assets managed
- Whether the work required professional skills
- The usual cost of comparable services
- The results and benefits provided to the principal
A payment that is excessive, undocumented or unrelated to the agent's duties may be challenged.
Can a Family Member Charge for Acting Under a Power of Attorney?
Yes, a family member may be entitled to compensation in some states, although many family members serve without pay. The family relationship alone does not decide the issue.
Before taking money from the principal's account, a family-member agent should check:
- The compensation section of the power of attorney.
- The law in the state that governs the document.
- Any limits imposed by a court, trust, benefit program or other legal arrangement.
- Whether the payment is reasonable and properly documented.
Some states have special rules for relatives. For example, West Virginia's version of the Uniform Power of Attorney Act generally excludes an ancestor, spouse or descendant from compensation unless the document specifically authorizes payment.
What If the Power of Attorney Says the Agent Is Unpaid?
If the document states that the agent receives no compensation, that instruction will usually control, subject to applicable state law.
The agent may still be entitled to reimbursement for reasonable expenses if the document or state law permits it. The power of attorney should distinguish between:
- No compensation for services
- Reimbursement of expenses
- Payment for professional services
- Payment for extraordinary work
Clear wording can reduce disputes between family members and make it easier to evaluate whether a payment was proper.
Can an Agent Pay Themselves?
An agent should not transfer money to themselves without authority. A power of attorney agent has fiduciary duties to the principal and must avoid improper self-dealing. New York law describes the agent's relationship with the principal as fiduciary, and the American Bar Association also explains that agents generally owe fiduciary duties.
Before paying themselves, the agent should:
- Confirm that compensation is authorized.
- Use a reasonable, supportable amount.
- Record the date, amount and reason for the payment.
- Keep time records or expense records.
- Keep the principal's money separate from personal funds.
- Notify interested family members or other required parties when appropriate.
If the authority is unclear, the agent should obtain advice from an estate-planning or elder-law attorney before taking payment.
Does the Lawyer Who Prepares the Power of Attorney Get Paid?
Usually, the lawyer who drafts or reviews a power of attorney may charge a separate legal fee. That fee is different from compensation paid to the person appointed as agent.
The agent manages the principal's affairs. The lawyer provides legal services related to drafting, reviewing or explaining the document.