Question: My mother signed a durable power of attorney naming me as her agent. The POA gives me rights to everything and she has been put in a nursing home. The home I have lived in for the past 24 years is still in her name. Can I use the POA to sell it to myself (or anyone else I choose) for any amount of money? Could I just do a quit claim deed to myself? Or sell it to myself for $1?
Answer: Oh my God, no! Roger, no! No to everything! Step away from the keyboard! Put down the pen! Take no further action with your mother’s assets until you get a better handle on what it means to have fiduciary obligations to her.
When your mother appointed you to serve as her agent, it didn’t give you “rights” to anything. It gave you the power to act on her behalf. When someone gives you this power, you are legally obligated to use it in his or her best interest, and the rules that arise out of this obligation are the most stringent in the law. You are your mother’s fiduciary. This means putting her interests ahead of yours. At all times.
Self-dealing: As bad as it sounds
One of the easiest ways to run afoul of your fiduciary obligations to your mother is to engage in self-dealing — to sell your mother’s assets to yourself, or vice versa. There are ways that your mother could have transferred the house to you, if that’s what she wanted to do. Unfortunately, regardless of how certain you are that this is what she would have wanted, that didn’t happen. But not only is the power of attorney not a way for you to accomplish that transfer now. It’s an obstacle to getting it done, because now you have to be extra careful about demonstrating that any transaction that does occur is in her best interest and does not benefit you at her expense.
You probably just shouldn’t transfer the house to yourself, but if you are determined to do it, you absolutely may not do it in any of the manners that you described in your question. You must carry out the transaction in a way that ensures that your mother gets the best deal she could reasonably get. That means paying fair market price, and taking steps to create a paper trail showing that you did so, such as having a professional appraisal done and getting bids from other interested parties on the open market before you make the purchase. You are treading in very dangerous waters here, and in the event that you do proceed with this idea, you should do so with the oversight of legal counsel..
Identifying an agent to handle your financial matters is a critical part of putting together a complete estate plan. As should be evident from the discussion above, not everyone is clear on what appointing someone to serve as your agent means. If you need to appoint an agent, or have been named someone else’s agent, please contact me to discuss the rights, obligations, and duties of this important role.