What a Power of Attorney Agent Must Do in North Carolina — and What They Can't

If someone has named you as their power of attorney agent in North Carolina, you hold real legal authority — and real legal responsibility. This page explains what North Carolina law requires of you, what you're prohibited from doing, and what happens if you fall short.

What Is a Power of Attorney?

A power of attorney (POA) is a legal document in which one person (the principal) gives another person (the agent) authority to act on their behalf — for financial decisions, real property, business matters, or other purposes.

In North Carolina, POAs are governed by the NC Uniform Power of Attorney Act, codified at G.S. Chapter 32C (effective January 1, 2018).

Most POAs used for elder care planning are durable, meaning they remain valid even if the principal later becomes incapacitated. A document is durable if it contains language like: "This power of attorney shall not be affected by the subsequent incapacity of the principal."

What a POA Agent Must Do: Non-Waivable Duties

Regardless of what the POA document says, North Carolina law imposes certain duties on every agent that cannot be waived (§ 32C-1-114(a)):

  • Act in good faith toward the principal
  • Act only within the scope of authority granted by the document
  • Act so as not to create a conflict of interest that would harm the principal's interests
  • Keep the principal's property separate from the agent's own property

These duties apply even if the POA document tries to say otherwise. They exist to protect vulnerable principals from agents who might abuse their position.

Default Duties (Can Be Modified in the Document)

Unless the POA document says differently, an agent must also (§ 32C-1-114(b)):

  • Act loyally in the principal's best interest
  • Avoid self-dealing — don't benefit yourself at the principal's expense
  • Act with care, competence, and diligence as a reasonably prudent person would
  • Keep records of all receipts, disbursements, and transactions
  • Cooperate with a healthcare agent if the principal has also appointed one under a healthcare power of attorney
  • Attempt to preserve the principal's estate plan — consider the principal's estate plan when making decisions, to the extent it's consistent with the principal's best interests

What a POA Agent Cannot Do

Even with broad authority granted under the document, a POA agent in North Carolina cannot:

  • Create or change a will for the principal
  • Make a gift to themselves unless the document expressly authorizes it (§ 32C-1-201)
  • Make a gift to anyone else in excess of the annual IRS gift tax exclusion unless expressly authorized
  • Create or revoke a trust unless expressly authorized
  • Delegate agent authority to someone else unless expressly authorized
  • Disclaim an inheritance on the principal's behalf unless expressly authorized

The reason these acts require explicit authorization: they all have the potential to shift the principal's assets in ways the principal may not have intended.

North Carolina Case Law on Agent Duties

Courts have consistently held agents to a high standard.

In Horry v. Woodbury, 189 N.C. App. 669 (2008), the Court of Appeals upheld a claim against an agent who used a POA to transfer assets to himself, finding that the agent's self-dealing breached the fiduciary duty owed to the principal.

In James v. Schoonderwoerd, 736 S.E.2d 99 (N.C. App. 2012), the court reinforced that an agent must prioritize the principal's interests above their own, and that actions taken "for the agent's convenience" rather than the principal's benefit may constitute a breach.

When Does a POA End?

A power of attorney terminates when (§ 32C-1-110):

  • The principal revokes it (in writing)
  • The principal dies
  • A court appoints a guardian over the principal (the guardian's authority supersedes the agent's in the areas covered)
  • The purpose of the POA is accomplished
  • The agent dies, becomes incapacitated, or resigns — unless a successor agent has been named

If a guardian is appointed, the agent's authority does not automatically terminate, but the guardian can petition the court to limit or revoke the agent's authority.

What If an Agent Misuses Their Authority?

Any interested person — a family member, healthcare provider, or the principal if they still have capacity — can petition the superior court under § 32C-1-116 for:

  • An accounting of the agent's actions
  • An order revoking the POA
  • Monetary damages for breach of fiduciary duty
  • A temporary restraining order if assets are at immediate risk

The court may also order the agent to repay any assets lost through misuse.

If the misuse involves an elderly principal who lacks capacity to protect themselves, it may also be reportable to Adult Protective Services under G.S. § 108A-100.

If You Are an Agent: A Practical Checklist

  • Keep a separate ledger or spreadsheet of every transaction you make on the principal's behalf
  • Never mix the principal's money with your own accounts
  • Save all receipts, bank statements, and records
  • Do not make gifts to yourself or others without explicit authorization in the document
  • If you are unsure whether an action is authorized, consult an elder law attorney before acting

The information on this page is for educational purposes only and does not constitute legal advice. Please consult a licensed North Carolina attorney for guidance specific to your situation. Learn more about ElderAdvocate.law.