Is a Power of Attorney Responsible for Debts?


A power of attorney document gives you the authority to act as an agent or attorney-in-fact for an individual known as the “principal.” As a POA agent you operate in a fiduciary capacity, and, depending on the terms of the POA, your responsibilities may include paying bills and debts. However, as an attorney-in-fact you have no claims on the assets of the principal, and neither do you have responsibility to pay the principal’s debts with your own money.

Limited Versus General

If you create a limited POA your appointed agent can only perform certain functions. The POA specifies the role of the agent, and that person can only have access to accounts and information that the POA specifically describes. A general power of attorney gives someone much greater access to your assets and financial affairs and often times a general POA enables someone to take care of all of your finances and to pay all of your bills. A POA can both open and close accounts on your behalf but must act in your best interests when making financial decisions on your behalf.

Durable POA

Limited and general POAs become null and void if the principal becomes incapacitated, which means the agent no longer has any authority to act on the principal’s behalf. However, you can also create a durable POA, in which case the agent has the authority to act on your behalf even if you become incapacitated. However, the powers of an agent on a durable POA cease upon the death of the principal, and thereafter control of your assets and financial affairs must pass to your estate.


You can only appoint a legally competent adult to act as your agent, and in most states people are classified as legal adults at age 18. Carefully select your POA since an unscrupulous person could easily abuse the position to steal your money or mishandle your assets. You can revoke a POA at any time, and the person that you choose does not have to agree to act as your agent. Some people appoint lawyers to act as their POA rather than family members, but you can only appoint a lawyer if that person has a license to practice law in your state.


While an attorney-in-fact or agent has no responsibility to settle the debts of the principal, state laws do enable principals to hold the agent accountable for misconduct. If you make investment decisions on behalf of the principal, and those investments perform poorly, then depending on your state’s laws and the wording of the POA, the principal may have the right so sue you. Likewise, if you fail to pay bills on time and neglect your fiduciary responsibilities, the principal can pursue you for financial damages. Therefore, you should not agree to act as an agent unless you plan to perform the duty as instructed.

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