If a person has a POA on a checking account and the account becomes overdrawn is the POA liable for any of the funds? What protects the principle owner from the POA owner?
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A power of attorney is a document signed by a person known as the principal or grantor, granting authority to another person, known as the agent or the attorney-in-fact (AIF), to complete certain acts on behalf of the grantor. The authority granted by the document is also sometimes referred to as a power of attorney.
To restate your question: if an individual holds a power of attorney granting him authority to transact business in the grantor's checking account and the account becomes overdrawn, is the attorney-in-fact liable for the amount of the overdraft? What protects the principal or grantor from the attorney-in-fact?
As long as the transactions completed by the AIF were made on behalf of the grantor, the grantor and not the AIF, is liable for the overdraft. However, the grantor can take legal action against the AIF to recover funds if it turns out that the AIF's transactions were not made on behalf of the grantor, and if any of the checks written benefited the AIF without the grantor's authorization.
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A power of attorney is a document signed by a person known as the principal or grantor, granting authority to another person, known as the agent or the attorney-in-fact (AIF), to complete certain acts on behalf of the grantor. The authority granted by the document is also sometimes referred to as a power of attorney.