What is the standard of care for a power of attorney agent?

• A. Maximize the principal's wealth regardless of other considerations
• B. Act with the same care as a prudent person dealing with property of another and avoid conflicts of interest
• C. Take actions to minimize costs even if it harms the principal's interests
• D. Delegate all decisions to third parties when unsure

Answer: (B)

The standard of care for a power of attorney agent is that the agent acts as a fiduciary, using the same care, diligence, and prudence that a reasonably prudent person would use when managing the property of another. This means putting the principal’s interests first, avoiding conflicts of interest, and making decisions that are reasonable given the authority granted and the principal’s needs and aims. The agent should handle funds and property honestly, keep good records, and avoid self-dealing or taking actions that benefit the agent at the principal’s expense. Decisions should be guided by what is best for the principal, not by the agent’s desire to maximize wealth or minimize costs at the principal’s expense, and the agent should not delegate away responsibility unless the authority to do so is clearly provided. So, acting with the care and loyalty of a prudent person dealing with someone else’s property, while avoiding conflicts of interest, best reflects the agent’s duties.