Liability of my healthcare agent

Before I answer your question, let me encourage you (if you have not already) to talk to your daughter about your wishes and your selection of healthcare agent.  People are much less likely to get hurt and upset if they are forewarned about decisions that may upset them.
 
Now, two things.  First The Massachusetts healthcare proxy law (Massachusetts General Laws Chapter 201D) states that healthcare agents will not be liable, criminally or civilly, for decisions they make in good faith.  The law also specifies that an agent will not be liable for the cost of health care required as a result of her decisions (unless—as in the case of a spouse or parent—she would have been liable anyway).  Second, most proxy forms have some language (and you can execute a new proxy if yours does not) indemnifying your agent from legal or other expenses incurred in her capacity as agent.  Such an indemnification will protect your agent if, for example, she is forced to defend decisions made on your behalf in a legal action brought by a family member or other interested party.  Here is some sample language:
 
"My Health Care Agent shall not be entitled to compensation for services rendered hereunder but shall be entitled to reimbursement for all costs and expenses incurred in good faith in acting hereunder.  My Health Care Agent shall be indemnified and held harmless for all actions taken in respect of this instrument except only those determined by final judgment or final decree of a court to have been taken in bad faith.  This indemnity shall include, but not be limited to, the costs and attorney's fees incurred by my Health Care Agent in bringing, defending or participating in any proceeding respecting this instrument or respecting my Health Care Agent's actions or authority hereunder."
 
Good luck, and please tell your friends about The Forum.