South Dakota POA Agent Responsibilities and Fiduciary Duties

Being named as someone's power of attorney agent is not an honor — it's a legal obligation. In South Dakota, the agent's duties are codified under SDCL 59-12-13, and violating them can trigger civil liability, personal financial exposure, and criminal prosecution. Understanding exactly what the law requires protects both the agent and the principal.

Mandatory Fiduciary Duties

Under SDCL 59-12-13, every agent must:

Act in good faith. The agent must make decisions honestly and without deception. Self-serving transactions that benefit the agent at the principal's expense violate this duty.

Act within the scope of authority granted. The agent can only do what the POA document specifically authorizes. A general grant of authority over banking does not extend to real estate transactions unless real property is also listed.

Act in accordance with the principal's reasonable expectations. If the principal has expressed preferences — keeping certain accounts, maintaining specific investments, supporting particular family members — the agent must respect those wishes even if the agent disagrees with them.

Act loyally for the principal's benefit. The agent must act for the principal's benefit and avoid conflicts that impair impartial action in the principal's best interest. The agent is not automatically barred from benefiting, but must still meet the statutory care, competence, diligence, and best-interest duties.

Preserve the principal's estate plan. The agent attempts to preserve the principal's known estate plan only when doing so is consistent with the principal's best interest.

Record-Keeping Requirements

The agent must keep detailed records of all transactions conducted under the POA. This includes:

• All receipts and disbursements
• Bank statements and transaction records
• Tax filings made on the principal's behalf
• Property management records
• Investment account statements

Under SDCL 59-12-15, the principal, a guardian, a conservator, or another authorized person can petition the circuit court for review and an accounting from the agent. An agent who cannot produce records may face difficulty explaining transactions and potential liability.

Cooperation with Healthcare Agent

If the principal has both a financial POA and a healthcare POA naming different people, the financial agent must cooperate with the healthcare agent. Practically, this means paying for medical treatments the healthcare agent has authorized and facilitating care decisions that require financial resources.

Compensation and Expenses

Unless the POA document specifies otherwise, a South Dakota POA agent is entitled to reasonable compensation for their services. What's "reasonable" depends on the complexity of the work and local standards. Agents who are family members often serve without compensation, but they are still entitled to reimbursement for out-of-pocket expenses incurred while managing the principal's affairs.

The agent should document all compensation taken and expenses reimbursed. Undisclosed or excessive compensation is a red flag for financial exploitation.

Liability and Criminal Exposure

An agent who violates their fiduciary duties may face:

Civil liability under SDCL 59-12-16 for damages caused by the breach. The principal, their estate, or a court-appointed guardian can sue to recover misappropriated funds.

Criminal prosecution under other applicable laws for financial exploitation of an elder or disabled adult. Depending on the amount involved, charges can range from misdemeanor petty theft to felony grand theft.

Removal by court order. A family member or interested party can petition the circuit court to revoke the agent's authority and appoint a successor.

Protecting Yourself as an Agent

If you've been named as someone's POA agent, protect yourself by:

• Keeping the principal's funds completely separate from your own accounts
• Maintaining meticulous records of every transaction, no matter how small
• Getting written authorization before making any large or unusual transactions
• Consulting the principal whenever possible before making decisions
• Never making gifts to yourself or family members unless the POA explicitly authorizes gifting and you follow SDCL 59-12-39. Unless the POA states otherwise, that statute generally uses the annual federal gift-tax exclusion per donee for the applicable year and requires consideration of the principal's known objectives or best interests, obligations, taxes, benefit eligibility, and gifting history.

The South Dakota Power of Attorney Kit includes an agent duties reference guide and a record-keeping template so agents stay compliant with SDCL 59-12-13 from day one.

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