Agent Duties Under Power of Attorney in Iowa

Being named as agent in an Iowa power of attorney is not an honor — it is a legal obligation. Iowa Code Chapter 633B imposes strict fiduciary duties that carry personal financial liability if you get them wrong. Understanding exactly what the law requires protects both you and the principal.

The Core Fiduciary Duties

Act in the Principal's Expectations or Best Interest

Your primary obligation is to act in accordance with the principal's reasonable expectations. If the principal told you they want their house maintained but never sold, you cannot sell it — even if selling would be financially advantageous.

When the principal's expectations are unknown (because they are incapacitated and never expressed specific wishes), you must act in their best interest. Best interest is not the same as what you personally would do — it is what a reasonable person in the principal's position would want.

Loyalty and Good Faith

You must act honestly and loyally. This means putting the principal's interests ahead of your own in every transaction. You cannot use the principal's assets for your personal benefit, direct business to companies you own, or take compensation beyond what the POA document authorizes.

Avoid Conflicts of Interest

Any transaction where you stand to benefit personally creates a conflict. Buying the principal's property at a discount, hiring your own business to provide services, or lending the principal's money to yourself — these all violate the duty to avoid conflicts.

If a conflict is unavoidable, the transaction must clearly benefit the principal and you should document why it was in their interest.

Keep Personal and Principal Funds Separate

Never commingle the principal's money with your own. Maintain separate bank accounts, separate records, and clear documentation of every deposit, withdrawal, and transfer. Even temporarily moving the principal's funds into your personal account creates commingling problems.

Maintain Records

Keep detailed, contemporaneous financial records of every transaction — receipts, bank statements, invoices, tax filings, and correspondence. Iowa law allows the principal (or a designated third party identified in the POA) to demand a full, itemized accounting of all receipts, disbursements, and transactions at any time.

These records are your defense if a family member challenges your management or accuses you of mishandling assets.

How to Sign Documents as Agent

Never sign as yourself. The proper format is:

"[Principal's Full Legal Name] by [Your Full Legal Name], as Agent under Power of Attorney dated [date]"

Signing as yourself — without the "as Agent" designation — can make you personally liable on the contract. This matters enormously for leases, mortgages, service agreements, and any obligation that creates ongoing financial liability.

Hot Powers Require Specific Authorization

Even if the POA grants you broad general authority, six categories of sensitive transactions are completely off-limits unless the principal specifically initialed each one in the document:

1. Creating, amending, or revoking a trust
2. Making monetary gifts
3. Changing beneficiary designations
4. Delegating your authority to someone else
5. Waiving survivor annuity rights
6. Exercising fiduciary powers

If you perform any of these without the required initials, the transaction is void — and you face personal liability for any resulting harm.

Personal Liability

An agent who violates fiduciary duties under Iowa law can be held personally liable for:

• Financial damages to the principal
• The principal's attorney fees and court costs
• Disgorgement of any profits gained from the breach

Family members, co-agents, or the designated accounting reviewer can petition the court to compel an accounting or remove a breaching agent.

When Your Authority Ends

Your authority terminates immediately when the principal dies, when the principal revokes the POA, when a court appoints a conservator (unless the court allows your authority to continue), or when a termination event specified in the document occurs. Any transaction you attempt after termination carries personal liability.

Take the Role Seriously

The Iowa Power of Attorney Kit includes an agent duties reference guide with record-keeping templates, signing format examples, and a fiduciary checklist — practical tools that help you meet Iowa's legal standards from day one.

See more Iowa guides →