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Am I legally obligated to help my sister?

Q. About 20 years ago my sister “Ruthie” named me as her power of attorney. We got into a disagreement a few years back and have not spoken since. I prefer it this way. Recently Ruthie was diagnosed with dementia and my other sister is telling me that I must help Ruthie manage her affairs or I can be held liable if Ruthie is scammed or otherwise taken advantage of. As I said, Ruthie and I do not get along and I don’t want to help her. Can I “appoint” my other sister to work for Ruthie? Is it true that if some financial harm comes to Ruthie that I can be held responsible?

A. Like so many legal questions, it depends on many factors like how the document is written and what actions, if any, you have ever taken relative to the power of attorney. When you were made aware of being appointed as her agent under the power of attorney, did you agree to act? A person who is designated as an attorney-in-fact has no duty to exercise the authority granted in the power of attorney unless they expressly agree to act, and this agreement must be in writing. However, if you started a transaction on behalf of Ruthie by using the power of attorney at any time, you are obligated to complete that action. Also, remember that an attorney-in-fact is held to a fiduciary standard, so if you agreed to act and then decide not to, or if you started a transaction and decide not to complete it because you are no longer speaking with Ruthie, you can be held responsible.

As for appointing your other sister to work for Ruthie, this also depends on how the document is written. Read the document. Did Ruthie name someone as a successor to you, should you be unable to act or, in your case, decide not to act? If someone is named as “next in line,” you can simply decline your appointment and the next agent will then be in the seat under Ruthie’s power of attorney. This declination to act usually must be in writing and the next agent in line should be notified. Have an attorney review the document for you and outline your obligations and alternatives.

Absent a successor named in the document, despite Ruthie’s dementia diagnosis, she may still have enough capacity to sign a new power of attorney and appoint someone else. There are varying degrees of capacity needed to sign legal documents. Surprisingly, agreeing to get married requires the least capacity – but that topic is for a different column! If Ruthie’s dementia is too far progressed, she may lack capacity to sign new documents in which case you may be the only one that has the power to help her. Consider this situation carefully, if Ruthie is too far into the dementia diagnosis, she truly needs help. You are, by way of the power of attorney, in a position to provide her with that needed help. Can you set aside your differences long enough to be sure she is protected? She trusted you at the time she appointed you and now she needs you. Unless there is a viable alternative, while you may not be legally obligated to help, you may regret it if you decide not to help and she is harmed as a result.

Liza Horvath has over 30 years’ experience in the estate planning and trust fields and is a Licensed Professional Fiduciary. Liza currently serves as president of Monterey Trust Management. This is not intended to be legal or tax advice. If you have a question, call (831)646-5262 or email liza@montereytrust.com