QUESTION
Can a person legally cancel the large debt he owes to his father now that he has his father's power of attorney?
Asked on Oct 17th, 2013 on Estate Planning - Michigan
More details to this question:
I was wondering if someone who has been named a person's power of attorney, can void a previously signed promissory note between those two? A relative of mine owes his father a significant amount of money due to a promissory note signed by both back in the year 2000. This person now has now gotten his father's durable power of attorney which he obtained by some questionable moves, but never the less now has his fathers power of attorney.
12 ANSWERS
David Thomson Egli
The agent/attorney-in-fact under a power of attorney is a fiduciary and owes certain duties to the principal, including that the agent must act solely in the interest of the principal and avoid conflicts in interest. An agent voiding his promissory note or cancelling his own debt owed to the principal could be considered a conflict in interest and a breach of the agent's promissory duties. If such is found to be a breach of duties owed by the agent, the cancelling of the debt could be void. The breach could also support a petition to terminate the right of the son to act under the power of attorney. However, is there a provision in the POA that specifically authorizes him to do this? Is this being done for reasons other than just to relieve the son of his liability to the father? If the son does cancel the debt or take other actions that do not seem in the best interest of the father, consideration should be given to consulting with an attorney to determine what actions should be taken to void any improper actions, terminate the powers of the agent or otherwise protect the father and his property.
Answered on Oct 17th, 2013 at 2:24 PM
3 Awards
Not legally. A fiduciary may not act for his own personal advantage. This information is only intended to give general information in response to an inquiry. It does not establish an attorney client relationship. This response is only based upon the limited facts presented and is merely intended to assist you in determining if you should contact an attorney to provide you with legal advice.
Answered on Oct 17th, 2013 at 2:22 PM
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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That would be a gfit to himself. Poswer of atty does not include power to make gifts unless it explicitly written in the power of attorney.
Answered on Oct 17th, 2013 at 1:44 PM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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Absolutely not. An agent under a power of attorney may not engage in self-dealing. All acts taken as agent must be only for the benefit of the principal. The agent owes the principal the highest duties of loyalty and diligence.
Answered on Oct 17th, 2013 at 12:28 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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My guess is that it can be challenged as a conflict of interest and a breach of fiduciary duty. Having said that, if he is the only child and stands to inherit everything anyway, it really doesn't make a difference.
Answered on Oct 17th, 2013 at 11:51 AM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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No, because he lack his father's consent. The grant of a power of attorney to another person, the grant of a power of attorney for financial affairs, carries a duty of acting in a fiduciary capacity for the benefit of the grantor of the power, not against the grantor of the power.
Answered on Oct 17th, 2013 at 11:46 AM
If a Judge were involved, I seriously doubt that this would be allowed.
Answered on Oct 17th, 2013 at 11:43 AM
Thomas Edward Gates
One would have to look at the terms of the POA. There is normally a section that states that the attorney-in-fact can or cannot gain personally from a dealing. In this case, if he voids the loan he is gaining personally. If he does questionable acts, you can file a motion for an accounting to make sure he is not pushing the envelop.
Answered on Oct 17th, 2013 at 11:36 AM
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You cannot use the POA in any way that benefits you directly.
Answered on Oct 17th, 2013 at 11:34 AM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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No. An agent under a POA would not be able to do this. It would be a conflict of interest and a breach of fiduciary duties.
Answered on Oct 17th, 2013 at 11:26 AM
Absolutely not. The attorney-in-fact has an even greater obligation to behave ethically, especially with regard to the financial matters of the grantor. Any attempts to benefit himself either on his own using the power granted or by influencing the grantor to take stops that will benefit the attorney-in-fact are usually considered criminal actions.
Answered on Oct 17th, 2013 at 10:46 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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I need the details but generally such self-dealing would be impermissible.
Answered on Oct 17th, 2013 at 10:39 AM