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No one likes the idea of finding themselves so incapacitated that they can not pay their own bills or make their own medical decisions, but it is important to have a plan in case this happens. Creating a power of attorney and appointing an agent to act on your behalf in these situations is essential.

The authority granted through a power of attorney can often be extensive, giving someone the ability to do anything that the creator of the document could do with their own finances. Unfortunately, this sometimes results in the agent taking advantage of their position and committing wrongdoing in favor of themselves rather than the principal. Read on to find out what to do if you or a family member suspects that someone is abusing the power granted to them through a power of attorney.

What Is a POA?

A power of attorney (or “POA”) names an agent who is legally authorized to make decisions on behalf of another person (“principal”) in regard to medical care, finances, taxes, and other authorizations, depending on which powers are stated within the power of attorney document itself. A person may elect a POA to come into effect only in the event of incapacitation or immediately after signing. A POA can be used to manage various aspects of its creator’s life such as:

• Paying medical bills
• Making mortgage payments
• Managing bank accounts
• Paying property taxes

A POA is an essential part of planning an estate plan. It is important to plan ahead to be prepared in case of incapacitation. Without a POA, family members may not have the authority to speak on behalf of their incapacitated relative and will not be able to help take care of things during this stressful time. Planning who will manage finances, taxes, and even businesses will alleviate stress from the family.

Selecting a Person to be Your Agent

Choosing a person to be your agent in the POA is a very important decision. The agent will be in charge of a person’s financial life. Powers granted within the POA can be as broad or specific as one would like. For example, the POA may be limited to only allow for paying medical expenses or credit card bills. Or, a POA could put a person in charge of all financial matters.

The elected agent should be a trustworthy person since they will be making decisions on behalf of the principal. This person may have access to all bank accounts, so they need to be fiscally savvy and trustworthy with money. This person should also be able to act as the principal would and should act as they believe the principal would want. When a POA goes into effect, the principal may not be able to oversee actions the agent will be taking. For this reason, it could be very easy for an agent to take advantage of their position without the incapacitated person even knowing.

When a person decides to create a POA, they should seek guidance from an experienced estate planning attorney who will evaluate their needs and assess their overall financial situation in order to create a POA tailored specifically to them. An estate attorney can also help a person decide who would be the best person to take on the agent role.

Most people decide to create a POA that goes into effect immediately after signing rather than at the time of a specific event. This prevents obstacles from arising such as medical sign-offs from doctors to certify that the person is incapacitated. Acquiring these signatures can take time and prevent the POA from being used to handle pressing financial situations. Allowing the POA to go into effect immediately avoids legal obstacles and alleviates stress on the family.

What if You Suspect the POA of Wrongdoing?

As noted earlier, those given authority under a POA have access to many aspects of a person’s life, so it would be very easy to take advantage of this position. This is why it is so important to choose an agent very carefully.

For example, let’s say a father, Jon, elects his son, Rob, as his agent. Rob is in charge of Jon’s finances. Rob has access to all of Jon’s bank accounts so he is able to pay bills for his dad. Rob is exclusively in charge of paying medical bills, filing taxes, paying taxes, and paying credit card bills. But since his dad is not of sound mind, Rob has started to use money from his father’s bank accounts to pay off his personal credit cards.

This is obviously not permitted and can ultimately be stopped. Unfortunately, if the principal is not of sound mind, it may be hard to catch. Whenever a family member becomes incapacitated, it’s important for everyone to keep a close eye on the situation to make sure that person’s resources are not being misused.

If there is a suspicion that the agent is abusing their power, contact an attorney to revoke the power of attorney. If the principal is not of sound mind, a family member can go to court and ask for conservatorship or permission to oversee the actions of the agent, or to have them removed from the role entirely.

An agent authorized under a POA that is taking advantage of their position could face both civil and criminal charges. In civil court, the bad actor could be sued and may have to pay restitution to the principal. In criminal court, the agent could be charged with fraud, exploitation, or even abuse.

Where Can You Turn for Help?

Before creating your estate plan, contact Rosenblum Law for guidance on estate planning and electing an agent to serve under a Power of Attorney. The person given this authority should only be chosen after careful consideration. This person needs to be a trustworthy, responsible person.

Abusing the position of Power of Attorney could easily go undetected. If you suspect or know that someone is handling matters improperly, contact Rosenblum Law to discuss the necessary actions that need to take place in order to stop this from continuing.