Avoiding Power of Attorney Abuse
For many of us, there is no legal document that has the potential to become as important in our lives as a power of attorney. In the event of our incapacity, a power of attorney can help ensure that our desired decisions will be made for us by the right people at the right time. A well-drafted power of attorney will increase the likelihood that our values will be respected and our intentions and goals will be pursued despite our future incapacity. Powers of attorney are easy to implement, relatively easy to understand and use, and inexpensive to create. This makes them an exceedingly valuable planning tool. Unfortunately, they can also be exceedingly dangerous and, if they get in the wrong hands, can become instruments of financial abuse and exploitation.
Avoiding Power of Attorney Abuse
How can you help ensure that your power of attorney will never be used to take advantage of you if you become incapacitated? Common protective provisions include (1) naming joint agents, (2) requiring approval of third parties for certain actions, such as gifts, (3) limiting the persons to whom gifts can be made, (4) requiring equal treatment among your intended beneficiaries if transfers are made, and (5) requiring the agent to file regular accounts or other reports with third parties. Above all, make certain the person you name as your agent is someone with the time, ability, and honesty to act on your behalf. A power of attorney is an invaluable legal tool. Be sure to take your time when you have one prepared and make sure that your document will protect you.
