Question: Hi. Both my parents signed power of attorney documents naming my sister as their financial agent. They now both have dementia and live in an assisted living facility. My sister wants to pay herself $50 an hour to do things like take them to the doctor, pick up their prescriptions, do some occasional shopping, and other menial tasks. She claims she spends 10 to 20 hours per week running these errands for them. I find this hard to believe. I think she is exploiting the situation to try to enrich herself. When can someone with power of attorney be compensated, and what is a reasonable amount per hour for someone who is not skilled as a CPA or medical person? There is a clause in their will that says she can be paid but does not say an amount.
Answer: There are a few things going on here that need to be sorted out.
First, with regard to your last sentence about your parents’ will authorizing her to be paid, their will has no bearing on this situation. A will does not dictate anything until the person who executed it passes away.
The power of attorney documents govern what your sister is allowed to do for your parents and whether she is allowed to charge them for it. In at least one sense, a power of attorney is the opposite of a will — it is only effective while the person who created it is alive. You don’t say whether your parents’ powers of attorney authorize compensation. Colorado, however, has a statute that says unless a power of attorney states otherwise, “an agent is entitled to reimbursement of expenses reasonably incurred on behalf of the principal and to compensation that is reasonable under the circumstances.” C.R.S. 15-14-712. In other words, unless your parents specifically said that your sister is not allowed to receive compensation, then she can pay herself. But the amount has to be reasonable!
The question is, what is reasonable? The thing to note about the jobs listed in your letter is that they are not jobs that require a power of attorney to perform. While your sister is the only person allowed to pay for services performed for your parents out of their bank account, anyone can take them to the doctor, pick up their prescriptions, or do their shopping for them. If you think the amount she is charging for these tasks is unreasonable, offer to do them for less. Or find someone else who will do them for less (if you Google “errand running service,” you will get a whole list of people who do this professionally for less than $50 per hour). It will be very difficult for your sister to claim that the rate she is charging is reasonable if there is someone else willing to do the same jobs for a lot less money.
If this experience has raised concerns about whether your sister is fit for the job of serving as your parents’ financial agent, you may want to take legal action. You could apply to have yourself appointed as your parents’ conservator, which would give you the authority to watch over their finances for them.
Best of luck to you in getting this resolved.
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