Can a Power of Attorney Agent Legally Pay Themselves a Salary in South Carolina?

Taking on the role of an agent under a Power of Attorney (POA) is a massive responsibility. It often requires hours of managing bank accounts, selling real estate, dealing with medical billing, and organizing personal care for a vulnerable loved one. In South Carolina, many agents wonder if they can legally pay themselves a salary for this exhausting work. The short answer is yes, but it is highly restricted. Acting as a POA agent creates a strict 'fiduciary duty.' This means you must always act in the principal's best interest, not your own. If family members suspect you are using the principal's money to enrich yourself under the guise of a 'salary,' you could face lawsuits and criminal embezzlement charges.

Statutory Default Rules for Agent Compensation in SC

In South Carolina, the rules governing POAs are outlined in the South Carolina Uniform Power of Attorney Act (SCUPOA). Under S.C. Code Ann. § 62-8-112, unless the POA document specifically forbids it, an agent is entitled to 'reasonable compensation' for their services. However, 'reasonable' is a highly scrutinized legal term. If you are a professional accountant acting as an agent, a reasonable hourly rate will be higher than if you are a family member simply paying the utility bills once a month. Paying yourself a massive, fixed monthly salary (like $5,000 a month) just for being the agent is almost always viewed as illegal self-dealing. The courts, as demonstrated in precedents like Estate of Cumbee v. Cumbee, 333 S.C. 664 (SC Court of Appeals 1999), heavily punish agents who cannot prove their compensation directly matches the actual labor they provided to benefit the principal.

Reimbursing Out-of-Pocket Travel Expenses for Agents

Beyond compensation for time, S.C. Code Ann. § 62-8-112 also explicitly states that an agent is entitled to reimbursement for expenses reasonably incurred on behalf of the principal. If you live in Greenville and must travel to Charleston to maintain the principal's vacant house, you can reimburse yourself for gas, mileage, and necessary maintenance tools. However, you cannot use the principal's funds to pay for first-class flights, luxury hotels, or personal vacations, claiming it was 'necessary travel.' Every single penny you reimburse yourself must be backed by a receipt.

Keeping Ledgers and Accounting for Family Scrutiny

Under S.C. Code Ann. § 62-8-114, an agent has a strict legal duty to keep a record of all receipts, disbursements, and transactions made on behalf of the principal. If you decide to pay yourself an hourly rate for your work, you must keep a meticulous timesheet. Write down the exact date, the hours worked, and a detailed description of the task (e.g., '2 hours: Reconciling Medicare bills and speaking with nursing home administrators'). If a sibling or interested family member demands an accounting, and you cannot provide this ledger, the probate court in the principal's county-such as the Charleston County Probate Court, Charleston or the Richland County Probate Court, Columbia-can order you to return every dollar you paid yourself.

Penalties for Breach of Fiduciary Duty or Embezzlement

If you abuse your power and pay yourself an unjustifiable salary, you are committing a breach of fiduciary duty. In South Carolina, the family or a court-appointed conservator can sue you in civil court to recover the stolen funds, plus attorney's fees. Even worse, transferring the principal's money to your own bank account without legal justification is criminal embezzlement or financial exploitation of a vulnerable adult. The South Carolina Attorney General and local police heavily prosecute POA fraud, which can result in severe felony charges and years in state prison.

Step-by-Step Guide to Legally Compensating Yourself

If you plan to take compensation for your duties as an agent, you must protect yourself from legal blowback. We strongly recommend using our US Lawyers directory to consult an estate planning attorney before writing yourself a check.

Step 1: Review the Original Power of Attorney Instrument

Before taking a single dollar, thoroughly review the executed power of attorney. Because South Carolina law does not provide a pre-printed statutory short form for financial powers of attorney, these instruments are drafted individually by estate planning attorneys. Review the document carefully for any specific provisions regarding agent compensation. If the principal included a clause stating that the agent shall serve without compensation or explicitly waived fees, you cannot take a salary, no matter how much time or effort you invest.

Step 2: Establish a Reasonable Hourly Rate

If compensation is allowed, consult with a local elder law attorney to establish a fair market rate for your services. For basic bill paying and property management by a non-professional family member, courts generally accept rates comparable to a local administrative assistant or home health aide (e.g., $15 to $25 per hour).

Step 3: Maintain a Dedicated Ledger

Never mix the principal's money with your own. Keep the principal's funds in a separate bank account. Maintain an Excel spreadsheet tracking every hour you work and every expense you incur. When you write a check to yourself from the principal's account, write exactly what it is for in the memo line (e.g., 'Invoice #4 for November POA duties').

Valid vs. Invalid Agent Compensation

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