Power of Attorney Agent Duties in Tennessee

Being Named Agent Is a Legal Obligation, Not Just Permission

When your parent names you as their agent under a Tennessee Durable Power of Attorney, you gain authority to manage their finances — but you also inherit a strict set of legal duties. Tennessee recognizes every POA agent as a fiduciary under T.C.A. § 34-6-101 et seq., which means you owe your parent loyalty, good faith, and detailed accountability for every transaction you handle on their behalf.

The most common mistake adult children make is treating POA authority like informal family help. It isn't. Banks, brokerages, and courts can demand proof that you acted within legal boundaries, and failing to meet those standards can expose you to personal liability.

Who Can Serve as Agent in Tennessee

Tennessee law doesn't restrict who a principal can name as their agent. Any competent adult — a child, sibling, friend, or professional fiduciary — can serve. The principal can also name co-agents (two people acting together) or successor agents who step in if the primary agent becomes unable or unwilling to serve.

The practical consideration matters more than the legal one. The agent needs to be someone who lives close enough to manage in-person banking, real estate transactions, and healthcare facility interactions. A daughter in Nashville managing a parent's affairs in Memphis will spend significant time on the road if she doesn't have a local co-agent.

The Four Core Fiduciary Duties

Loyalty

Every decision you make must prioritize your parent's interests over your own. You cannot use their funds for your personal benefit, redirect their income to yourself, or make decisions that enrich you at their expense. This sounds obvious, but the line blurs fast — paying yourself a "caregiver salary" from their account without clear authorization and documentation can create a conflict-of-interest and accounting problem, even if you're providing genuine daily care.

Good Faith

You must act honestly and make decisions a reasonable person in your position would make. If your parent's investment portfolio needs attention, you can't ignore it indefinitely. If a bill goes unpaid and incurs penalties because you were negligent, that's a breach.

Accounting

Under T.C.A. § 34-6-107, you must maintain complete records of every transaction — deposits, withdrawals, payments, transfers, and investment changes. Here's where Tennessee's law creates a narrow protection gap: only the principal, a court-appointed conservator, or a "legal representative" specifically designated in the POA document can formally demand an accounting from you.

This means if your siblings suspect mismanagement, they cannot force you to open the books unless the POA document included a "legal representative" clause naming them or someone else with standing to demand records. Elder law attorneys in Tennessee routinely recommend adding this clause to prevent family disputes from escalating to court.

Prudent Management

You must manage your parent's assets with the care and skill that a reasonably prudent person would exercise with their own property. Don't speculate with their retirement savings. Don't let their homeowner's insurance lapse. Don't ignore property tax deadlines.

The Gift Restriction That Catches Families Off Guard

A general grant of financial authority under a Tennessee DPOA does not authorize you to make gifts, transfer property to family members, change beneficiary designations on life insurance or retirement accounts, or create trusts. These are sometimes called "hot powers" because they can dramatically alter your parent's estate.

If your parent needs you to fund a Qualified Income Trust for TennCare CHOICES eligibility, transfer property into an irrevocable trust for asset protection, or make annual gifts as part of a Medicaid planning strategy, those powers must be explicitly enumerated in the POA document. A DPOA that simply grants "full authority over financial affairs" doesn't cover them.

If your parent's existing POA lacks these specific grants and they still have capacity, the document should be updated before these actions become necessary.

What Record-Keeping Actually Looks Like

Maintaining compliant records doesn't require an accounting degree, but it does require consistency. At minimum, keep:

• Monthly bank and investment statements for every account you manage
• Receipts and supporting records for expenditures made on your parent's behalf
• Written records of why you made major financial decisions (selling property, changing investments, hiring caregivers)
• Copies of all correspondence with financial institutions, government agencies, and healthcare providers
• A running ledger that tracks starting balances, all income received, all disbursements made, and ending balances

Store everything digitally and in paper form. If a court or family member ever challenges your management, these records are your defense.

When Agent Authority Ends

Your authority as agent terminates automatically when your parent dies — not gradually, immediately. Any transaction you initiate after their death is unauthorized, and financial institutions can reverse it. The moment you learn of their passing, stop all account activity and notify the banks.

Your authority also ends if your parent revokes the POA in writing, if a court appoints a conservator whose authority supersedes yours, or if the POA document included an expiration date.

The Tennessee Power of Attorney & Guardianship Kit walks through each of these duties with checklists for record-keeping, a template for tracking disbursements, and the specific statutory language your parent's POA should include to prevent family disputes over accountability.

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