Power of Attorney – Can I borrow money from the donor?

Short answer on this is no, not sure why you thought it may be different. It’s not your money.

More – taken from http://johnmacaulay.com/borrowing-money-as-power-of-attorney/

It’s not a UK site but succinctly expresses it.

Borrowing Money as Power of Attorney

One of the questions which I am asked over the years is whether an attorney using the authority under a power of attorney can access money held for an incapable donor to be used for other purposes than to benefit the donor.

This situation arises most often when a child or children who are named as attorneys want to “borrow” money from the incapable person. The reason given is that Mom or Dad have more than enough money to keep them for the rest of their days and they would loan the money without question. Besides I am told “I will pay it back if it were needed”

I often hear that taking into account the income from government and other sources they will never need any more income. Sometimes this type of transaction is joined in and supported by all of the siblings.

Another justification given is that for estate planning reasons they wish to reduce the value of the estate on death and thereby pay less to the government. This is not within the authority of the attorney either since they are doing the same thing for another reason.

It is the attorney’s duty to use the power only for the benefit of the donor and not for the attorney’s own profit, benefit or advantage. The attorney can only use the power for his or her own benefit when it is done with the full knowledge and consent of the donor. I am not aware of any authority that detracts from this principle in circumstances where the benefit is conferred on family members.

An Attorney is a fiduciary whose powers and duties must be exercised and performed diligently, with honesty and integrity and in good faith, only for the incapable person’s benefit. An attorney who receives compensation for managing property must exercise the degree of care, diligence and skill that a person in the business of managing the property of others is required to exercise.

An attorney has an obligation to keep proper accounts. A trustee must keep a complete record of their activities and be in a position at all times to prove that they administered the trust prudently and honestly. They must have the accounts ready and give full information whenever required.
A trustee must make a proper accounting as a condition precedent to being awarded compensation. Without a proper accounting, the court is unable to assess the conduct of the fiduciary and to determine the compensation to which he or she is entitled.

An attorney who fails to retain receipts supporting substantial cash withdrawals or expenses charged against the incapable person’s property has not adequately carried out their duties and will be held personally liable for the unsubstantiated withdrawals.

From the Public Guardians Office

Again – no.

An in-depth explanation of what you can do. CA


More from the UK https://www.blakemorgan.co.uk/news-events/blog/making-gifts-under-power-attorney/

From Alzheimers.org.uk PoA’s are not authorised to take loans for themselves nor authorise loans for other people so far as I am aware. Others will be along with more knowledge than I but that’s my understanding from discussions with the OPG.

If you are really not sure and still want to consider the options of borrowing from the elderly parent – you are supposed to be acting in the best interests of – call the Public Guardians office – you’ll the same answer as above – it is not acceptable to borrow from a donor when you have power of attorney – not now not ever.