A power of attorney is a legal document that allows you (the “principal”) to name someone (called your “agent”) to act on your behalf in financial matters. In Georgia, a power of attorney agent is not entitled to compensation unless the document specifically states otherwise.
This is the case even if it is a durable power of attorney. (A power of attorney is “durable” if the power to act remains in effect even if the principal is incapacitated.)
If the power of attorney document is silent on compensation, an agent is only entitled to reasonable reimbursement of expenses they paid out-of-pocket while acting on the principal’s behalf.
An example of a reasonable reimbursement of an expense is if the power of attorney document allows your agent to act on your behalf for taxes, and your agent hires an accountant at a reasonable rate to prepare your tax return.
Georgia law did not always default to not compensating agents. In 2017, the Georgia legislature revamped the law governing powers of attorney. The change in the law was primarily to combat people abusing the power.
As part of these changes, the legislature intentionally defaulted to not compensating the agent. This is because the agent is typically a loved one or family member. For most situations, no compensation would be necessary beyond the reimbursement for reasonable expenses incurred while acting as the agent.
Under pre-2017 law, the legislature gave three options to compensate your agent: (1) no compensation; (2) reasonable compensation; (3) a specific amount determined by the principal. While the new law defaults to not compensating the agent, you still have the option to compensate your agent should you choose to do so.
Regardless of whether the power of attorney document allows for compensation, an agent should keep accurate records of all receipts, disbursements, and transactions made while conducting their duties. This documents the expenses to be later reimbursed and keeps the principal-agent relationship above board.
If you or a loved one have questions about a Power of Attorney instrument in Georgia, call us today at (678) 784-4150.