Legal Question in Elder Law in Arizona

''Gray Area'' using a general power of attorney

I have recently obtained the poa for my elderly father who has been admitted to a nursing home for a long term stay (probably ''for good''). In examining his assets I see that the monthly cost can be sustained as long as his rate of return is reasonable.

Here is the problem. I recently purchased some property and easily qualified for the mortgage. However when I look at the rate I am paying I would really like my father to get that return instead of the bank.

I understand that loaning money from the principal to yourself is frowned upon and the advice would probably be ''don't do it!''. However I wonder if it is actually legally forbidden. It isn't like I am buying myself a Ferrari or anything like that. I qualified for this mortage and am already paying the monthly payments (so this isn't ''for my benefit''). I would just rather pay them to my father, which would be to his benefit (see above). If I choose go down this road are there steps I need to take to protect myself?

I am the only child and my father is widower. Unfortunately he is not presently able to sign an addendum to the poa.


Asked on 6/05/05, 3:17 pm

1 Answer from Attorneys
Donald Scher Donald T. Scher & Associates, P.C.

Re: ''Gray Area'' using a general power of attorney

An Agent, acting under a power of attorney, must only act in the best interests of the principal and may not act for his own account because it is not an arms length transaction. Even though you are now making your mortgage payments properly, that does not mean that your father's estate can afford to take any risk that something could happen to you and that you may be unable to make payments. More important, you have a duty to invest his funds in a very conservative manner, not take any risk of the principle, so that all of his estate is available to pay for his care, support and maintenance. The mortgage rates are quite low today, and interest rates are expected to rise, as we have seen CD rates go up in the last few months. I would not advise you to do so and I do not see that it would be appropriate under the law.

Read more
Answered on 6/06/05, 9:35 am


Related Questions & Answers

More Elder Law questions and answers in Arizona