If I have power of attorney over my mother's estate and am late paying taxes for a few years, am I responsible for paying penalties and interests from my own pocket or can I pay out of her estate?
By Mari from Fairfax, VA
You need to call a lawyer, good luck.
As the Power of Attorney for my mom I can tell you that you are never responsible for out of pocket expenses nor can you profit from this. One thing I can say is this; if you don't pay the taxes which should come out of her money someone else may come and purchase the property for taxes owed and there is nothing you can do. Another thing is this; you have the responsibility of taking care of your mom's property as long as she lives; but when she passes if you are not the executor you will not be allowed to handle her affairs until one is appointed then they do it. Good Luck I know personally how much work this can be. My prayers go with you.
I would say it depends whose taxes you're talking about. If these are your mom's taxes, the money should come from her or her estate. If you're the one who owes, the honorable thing to do is use your own money.
Please, please don't abuse the privilege of having your mom's power of attorney! My hubby did this while I was recovering from a car wreck. He used my credit and my name and dug us into such a deep financial hole, we're still digging out three years after I started being able to have more control over my financial affairs.
First, "power of attorney over my mother's estate" is mixing up two different things.
Power of attorney authorizes you to act on behalf of a living person, if they become incapable (or unwilling) to handle their own affairs because of physical or mental incapacity. Power of attorney is granted to you by the person themself before they become incapable. (If a court grants you authority over an incapable living person's affairs, you are a court-appointed guardian, which includes power of attorney.) Power of attorney terminates immediately upon the death of the granting person.
If you are handling someone's estate, that means that they have died and you have been appointed executor by the Surrogate's Court (or whatever it may be called in your state).
In both cases you have authority over financial affairs, within narrower or broader limits; in the case of power of attorney, as spelled out in the document granting the power; in the case of an executor, as spelled out in the decedent's will or as the Court directs in its appointment.
AND-- in both cases you are responsible to use reasonable diligence and care in your management, paying just debts and preserving assets; in the case of power of attorney, you are responsible to the person granting the power; in the case of an executor, you are responsible to the estate and the Court.
If you have allowed taxes to go unpaid "for a few years," either from your living mother or from her estate, that is not "reasonable diligence and care in your management," and a court would probably hold you personally liable for penalties and interest, barring some serious extenuating circumstance.
In no case can you use the funds of your mother or her estate to settle your own personal tax liability, and doing so would make you liable to civil and quite possibly criminal penalties.
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