A person (“agent”) holding a power of attorney for another person (the “principal”) must act with the utmost degree of loyalty to the principal. The agent must avoid being involved in any transaction which benefits, or even which potentially benefits, the agent.
That rule of law was enforced once again in 2015 by the Texas courts in Jordan v. Lyles, No. 12-13-0035-CV, 2015 WL 393791 (Tex. App.–Tyler 2015, no pet. h.).
In that case, the agent used her power of attorney to place a significant portion of the principal’s money into pay-on-death accounts naming the agent as the beneficiary. At the principal’s death, the principal’s other heirs sued the agent for breach of fiduciary duty for moving the money and receiving it at the principal’s death. A Tyler jury found in favor of the heirs, and held the agent liable for breach of fiduciary duty and tortious interference with inheritance rights. The appellate court affirmed the jury’s verdict.
The moral to agents is this: If you conduct or participate in a transaction for the principal that benefits you personally, obtain bulletproof evidence that the principal instructed you to do so. If the principal has lost capacity, it is too late; and unless you obtain the advance approval of all beneficiaries under the principal’s will (or all heirs at law if the principal has no will or has a questionable will), you simply may not do anything with the principal’s property during the remainder of the principal’s lifetime that would be to your benefit.