Can An Agent Use Principal’s Money to Purchase Real Estate for Herself?

estate tax1Last week, I received a note from someone who was serving as her 97 year old mother’s attorney in fact. She wanted to cash out some of her mother’s stock and use the proceeds to purchase real estate. She asked whether it would be okay to list herself on the title of the property she purchased with her mother’s money.

The short answer is no.

An agent is a fiduciary who has a duty to act in the principal’s best interest. The fact that this individual has complete control over her mother’s finances does not entitle her to enter into financial transactions for her own benefit. As a fiduciary, she must keep all money and property separate. Title to her mother’s money and property should be kept only in her mother’s name.

You can learn more about your duties as an agent by reading the Consumer Financial Protection Bureau’s Guide to Managing Someone Else’s Money for agents under a power of attorney (pdf).

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