Abuse of Power: The Use and Abuse of the Power of Attorney
Powers of Attorney are typically used by the elderly to assign someone to manage their affairs should they become incapacitated. Typically, power of attorney is granted to a spouse, an adult child, or someone else that the individual trusts implicitly. It permits the individual, or agent, a broad spectrum of financial power over the incapacitated person, such as writing checks or selling property. Powers of Attorney were never intended to fund someone else's lifestyle or increase their wealth. Unfortunately, financial exploitation of the elderly using the cover of the Power of Attorney is increasing. Elderly citizens are losing their life savings and/or homes to untrustworthy individuals.
State laws govern Power of Attorney agents and its broad spectrum of power. Unfortunately, many states do not have safeguards in place to limit or monitor abuse of that power. The Uniform Power of Attorney Act (UPOAA) seems to be the government's answer to that abuse.
Currently, only New Mexico and Idaho have adopted the UPOAA, but twelve state legislatures are expected to consider its adoption in 2009. This law would require that a Power of Attorney document clearly state the agent's dutie, including the individual's responsibility to act in good faith. It would also force an agent abusive with their powers to be liable for any damages.
Other precautions can be taken to protect our elderly. When choosing an individual to hold power of attorney, consider how trustworthy and honest they are. Just because an individual is a relative does not ensure trustworthiness. Next, communicate to other family members who the power of attorney agent is and what the agent's powers should be. It never hurts to have others watching out for your well-being. Finally, consider having the power of attorney agent report to an objective third-party periodically.
