Power of Attorney Self-Dealing, Gifts

An attorney-in-fact is someone appointed by a principal under a power of attorney to make decisions on behalf of the principal. The decisions usually relate to financial or healthcare matters for the principal. An attorney-in-fact is a fiduciary of the principal and must act in the principal’s best interests. This generally includes an obligation to adhere to the terms and conditions of the power of attorney document. 
It should go without saying that attorneys-in-fact are prohibited from engaging in economic self-dealing when exercising authority under the power of attorney document. In furthernance of this policy, Missouri law prohibits an attorney-in-fact from making a gift of the principal’s property to himself or herself unless he or she has explicit written authorization in the power of attorney document to do so. Oral authorization is generally insufficient. The purpose of this rule is to protect the principals in the power of attorney document, who are often least likey to be able to protect themselves from self-dealing by unscrupulous fiduciaries. Absent this restriction, the potential for abuse would be great. The usual remedies if an attorney-in-fact breaches this obligation by making a gift to himself or herself is to void the transaction and/or seek damages against the attorney-in-fact. 
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