A financial power of attorney is a document that gives another person (an agent) the legal authority and power to act for an individual to manage his or her financial and legal affairs (e.g., investments, bank accounts, bill payments). The agent has the sole ad legal power to make all legal and financial decisions on behalf of the individual.
People can use a financial power of attorney to choose an agent to make financial and legal decisions for them, when needed—for instance, if they develop cognitive impairment that renders them incapable of making these kinds of decisions. There are different types of financial powers of attorney, and they are easy for anyone to create. Powers of attorney can vary in how specific they are and how they look. They do not require legal assistance or a court for execution.
State laws and regulations prohibit unethical and illegal use of powers of attorney. They clearly specify agent duties and responsibilities to help prevent power of attorney misuse and sometimes state penalties for such misuse, but still much can go wrong. Powers of attorney can be forged or otherwise improperly obtained without the other person’s knowledge or consent. An agent can easily use the older person’s money for his or her own benefit.
The best way for older adults to protect themselves from illegal or fraudulent use of financial power of attorney is to make sure that they understand which powers they are handling over to others. The financial power of attorney gives another person sole legal authority, total control, and use of all the older person’s assets and other financial resources.
Older adults can take these actions to help prevent financial abuse through their powers of attorney:
- List two parties as co-agents on a power of attorney (i.e., to act as a check and balance)
- Choose an agent who is not dependent on the older adult for financial support.
- Use an attorney or other trusted professional if family is a potential problem.
- Give financial institutions permission to refuse an questionable power of attorney.
- Have a different agent for financial power of attorney and medical power of attorney.
- Provide the bank with copies of any power of attorney that gives the agent any access to money; alert the bank if a power of attorney is revoked or agents are changed.
- Inform several people of the listed power of attorney agent(s) and who in the family is to be trusted.
- Consider signing a prior consent form with the bank or credit union. (A prior consent form authorizes a financial institution to release a customer’s financial records to authorities when financial exploitation is suspected.)
If you or a loved one would like more information about in-home care so preserve their independence and keep them in their home please call the caring staff at Rather Be Home. 330-327-8831
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