You can pay yourself as power of attorney, but only for actual work and only if the legal document allows it

As power of attorney, you have the legal right to be paid for the work you do managing someone else's finances or care—but only under specific conditions. The person who gave you power of attorney (called the principal) must have authorized compensation in the original document, or you must follow your state's rules for requesting court approval. You cannot straightforward take money from the account without documentation, and you must keep records of what you did and how much time it took.

The amount you can pay yourself depends on what you actually did. If you spent three hours organizing bills and paying them, you charge for three hours of work—not a flat fee or a percentage of the account. Some states allow a "reasonable" hourly rate; others set specific amounts. The principal's will or trust document may also set a cap on what you can take.

Key Takeaways

  • The power of attorney document itself must permit you to be paid, either by naming a specific amount or by allowing "reasonable compensation."
  • You must document every task you perform—paying bills, managing investments, arranging care—and track the time spent on each one.
  • Compensation is based on actual work performed, not a percentage of assets or a flat monthly fee, unless the document says otherwise.
  • If the document does not mention payment, you may request court approval in probate or guardianship court before taking any money.
  • You must keep receipts, bank statements, and a written log of your work to justify the amount you took if anyone questions it later.

Check what the power of attorney document actually says

Before you take any money, read the power of attorney document word for word. Look for language about compensation, payment, or reimbursement. Some documents say "the agent may be paid reasonable compensation for services rendered." Others name a specific amount—"$500 per month" or "5% of annual income." A few say nothing about payment at all.

If the document explicitly allows payment, write down the exact language and keep a copy with your records. This is your legal permission slip. If it says nothing about compensation, do not take money without going to court first. Taking unpaid compensation when the document forbids it or is silent on it can expose you to a lawsuit from the principal's family or estate.

Some documents distinguish between compensation and reimbursement. Reimbursement means you pay for something out of your own pocket—postage, filing fees, travel—and then take that money back from the account. Compensation means you are paid for your time and labor. The rules are different for each.

Document every task and the time you spend on it

Keep a written log of the work you do. For each task, write the date, what you did, and how long it took. Examples: "March 15, 2024: Reviewed and paid three medical bills, organized insurance documents, called pharmacy about prescription refill. Time: 2 hours." Or: "April 2, 2024: Met with financial advisor about investment rebalancing, reviewed quarterly statements, sent summary to principal. Time: 1.5 hours."

Save all receipts, bank statements, bills you paid, and correspondence related to your work. If you had to travel to handle the principal's affairs, keep mileage records or receipts for gas and parking. If you paid for copies, notarization, or certified mail, keep those invoices. A year or two later, if someone challenges how much you took, this paper trail is what proves you actually did the work.

Do not estimate time retroactively. Write down your hours while the work is fresh in your mind. A log entry made the same day you worked is far more credible than one written months later from memory. If you work as a professional—accountant, lawyer, financial advisor—you may use your normal hourly rate. If you are not a professional in that field, use a rate that is reasonable for your area and the complexity of the work.

Understand what counts as compensable work

You can be paid for managing finances, arranging care, making medical decisions, paying bills, managing property, and communicating with professionals on the principal's behalf. You can charge for time spent reviewing documents, meeting with advisors, attending medical appointments, organizing records, and handling disputes or claims.

You cannot charge for personal visits, companionship, or emotional support—even if you spend hours with the principal. You also cannot charge for deciding to do something; you charge only for actually doing it. If you spend two hours thinking about whether to sell a house but do not take action, that is not compensable time. If you spend four hours preparing the house for sale, meeting with realtors, and reviewing offers, that is.

Some states and some documents allow you to charge a flat annual fee instead of hourly rates. If yours does, the fee should still be reasonable and proportional to the work involved. A $10,000 annual fee for managing a $50,000 account is not reasonable; a $1,500 annual fee for the same account might be.

Request court approval if the document does not permit payment

If the power of attorney document says nothing about compensation, you have two options: ask the principal directly (if they are still able to understand and consent), or petition the court. If the principal is mentally capable and agrees to pay you, get that agreement in writing and signed by the principal. Keep it with your records.

If the principal cannot consent or refuses, file a petition in probate court or guardianship court in the county where the principal lives. You will need to show the court what work you did, how much time it took, and what rate is reasonable for your area and the type of work. The court will either approve a specific amount or set a formula for ongoing compensation.

Court approval takes time and costs money—filing fees, possibly attorney fees. But it protects you. Once the court approves your compensation, no one can later sue you for taking that money. Without court approval, a family member or the principal's estate can challenge you after the principal dies or the power of attorney ends.

Pay yourself from the principal's account with a clear record

When you take compensation, do it in a way that leaves a clear trail. Write a check to yourself from the principal's account, or transfer money electronically with a memo line that says "compensation for power of attorney services, [date range]." Do not take cash. Do not make vague withdrawals. The bank record itself is part of your documentation.

Some agents set up a separate ledger or spreadsheet showing each withdrawal, the date, the amount, and what work it covers. This is especially important if you are taking compensation over months or years. At the end, you should be able to show anyone who asks: "I took $500 on March 20 for 10 hours of work at $50 per hour, documented in my log as [specific tasks]."

If you also need reimbursement for out-of-pocket expenses, keep those separate from compensation. Pay yourself reimbursement first—those are expenses the principal actually incurred. Then pay yourself compensation for your time. This makes it easier to explain to a court or auditor if needed.

Know your state's rules on compensation amounts

States vary widely in how much a power of attorney can take. Some states set a percentage of the account—typically 1% to 5% annually. Others allow "reasonable compensation" without defining it, leaving it to the agent's judgment or the court's review. A few states cap compensation at a specific dollar amount per year.

If the power of attorney document does not specify an amount and your state has no default rule, "reasonable" usually means what a professional in your area would charge for similar work. If you are a retired accountant managing a complex investment portfolio, you might charge $75 to $150 per hour. If you are a family member paying bills and managing basic care, $25 to $50 per hour is more typical. The complexity of the work and the size of the account matter.

Look up your state's power of attorney law or consult a probate attorney if you are unsure. Some states post their rules online; others require a brief conversation with a lawyer. The cost of that conversation is far less than the cost of a lawsuit later.

Frequently Asked Questions

Can I charge for time I spend thinking about what to do, or only for actually doing it?

You charge only for work you actually perform. Time spent deciding whether to sell property, reviewing options, or planning does not count unless it directly results in action. Once you begin executing the decision—meeting with professionals, preparing documents, handling the transaction—that time is compensable.

What if the principal's family disagrees with how much I took?

Your documentation is your defense. Show them your log of work performed, the time spent, and your hourly rate. If they still object, they can petition the court to review your compensation. The court will look at your records and decide whether the amount was reasonable. This is why keeping detailed logs from the start matters.

Can I take a percentage of the account instead of an hourly rate?

Only if the power of attorney document or your state law allows it. Most states require compensation to be based on actual work performed, not a percentage. Taking a percentage without permission is one of the most common reasons families challenge an agent's compensation.

Do I have to report the money I took to the IRS?

Yes. Compensation you receive as power of attorney is taxable income. You should report it on your tax return. If the amount is large, the principal's bank may issue a 1099 form. Consult a tax professional about how to report it correctly.

What happens if I took money without permission and now someone is suing me?

Consult an attorney when ready. Unauthorized compensation is a serious breach of fiduciary duty and can result in you having to repay the money plus interest and legal fees. An attorney can review your specific situation and advise whether you have a defense—for example, if the principal later ratified the payments in writing, or if you can show the compensation was reasonable and the principal benefited from your work.