In Wisconsin, an agent acting under a power of attorney, whether a financial power of attorney under Chapter 244 or a health care power of attorney under Chapter 155, is not automatically liable for decisions made in good faith within the scope of the authority granted, but an agent can be held liable if the agent breaches statutory or fiduciary duties.
For a financial power of attorney under the Wisconsin Uniform Power of Attorney for Finances and Property Act (Wis. Stat. ch. 244), an agent may be liable if (1) the agent acts outside the authority granted in the power of attorney; (2) fails to act in accordance with the principal’s reasonable expectations when known, or otherwise fails to act in the principal’s best interest; (3) acts in bad faith or with dishonesty; (4) engages in self-dealing or has an impermissible conflict of interest unless authorized by the power of attorney or otherwise permitted by law; (5) fails to act with the care, competence, and diligence ordinarily exercised by agents in similar circumstances; (6) misappropriates or improperly uses the principal’s property for personal benefit; (7) fails to keep required records of receipts, disbursements, and transactions made on the principal’s behalf; or (8) violates mandatory statutory duties, such as acting loyally for the principal’s benefit or cooperating with the principal’s health care decision-maker when necessary to carry out the principal’s wishes. A court may order an agent who breaches these duties to restore the value of the principal’s property, reimburse the principal for losses caused by the breach, return any profits the agent improperly obtained, and provide other equitable relief as appropriate.
For a health care power of attorney under Chapter 155, an agent may be liable if the agent fails to act in good faith, knowingly acts contrary to the principal’s expressed wishes or written instructions, acts outside the authority granted in the health care power of attorney, or makes decisions inconsistent with the principal’s best interests when the principal’s wishes are unknown. By contrast, a health care agent who acts in good faith and in accordance with Chapter 155 generally enjoys statutory immunity from civil and criminal liability for those decisions. Health care providers who rely in good faith on an apparently valid health care power of attorney are generally protected. Put simply, Wisconsin law distinguishes between good-faith decisions within the scope of authority, which are protected, and bad-faith conduct, breaches of fiduciary duty, self-dealing, negligence in carrying out statutory duties, or actions outside the agent’s authority, which can expose the agent to civil liability and, in some circumstances, criminal liability (for example, theft, financial exploitation, or fraud).
Please contact our Madison, Wisconsin estate planning attorneys if you would like to learn more on this topic!