The power of attorney is a legal document which gives a person or an organization power to govern finances, business or even personal issues. The person entrusted with this power/ authority is called the agent or attorney-in-fact while the person who signed the document is the principal.
The power of attorney is usually used to handle financial or business affairs when the principal is not available or incapacitated. There are power of attorney documents which allow the agent to continue being authority even the principal is no longer mentally capable. However, in elderly cases, power of attorney could be abused.
Financial/material abuse is the second highest rate of elderly abuse with 42%, following psychological abuse (59%). Financial abuse would include misusing the power of attorney, using the adult’s money for other purposes, pressuring adults to sell their home or property, cashing out the adult’s pension or cheque, or pressuring the adults to buy alcohol or drugs.
Abuse of the power of attorney could be intended or a sign of negligence. For example, a niece who runs off with her aunt’s money when given the power of attorney is a sign of intended abuse. The principal may not be able to monitor how transactions are made and eventually caused the agent to misuse his or her finances.
When identifying the person who would represent the interest of the principal, it is important to determine a person who is trustworthy and would not betray the interest of the principal. In addition, if the principal feels that the power of attorney is being exploited, then it would be time to get legal support.
Aside from issues about the agent’s trustworthiness, another common problem with the power of attorney is that the authority is too broad. When the principal uses the general power of attorney, the agent would find himself handling real estate, securities and large financial transactions.
To avoid this problem, the power of attorney should be specific enough. Identify particular obligations or transactions that the agent or attorney-in-fact could handle. Also, to avoid problems with abuse in the document, the American Bar Association suggests that list any powers that the principal don’t want the agent to have, like altering the principal’s will or giving away the principal’s property.
It may prove to be difficult for the agent to handle everything. In some cases, a co-agent is assigned by the principal to ensure that not all responsibilities would burden one agent. To exercise more control on the transactions, the principal is also recommended to ask regular reports from the attorney-in-fact/ agent.
Being aware of such issues about the power of attorney could help principals and those who are thinking of getting such document, be cautious. Although, there are forms on the internet that would allow you to create the power of attorney quicker, it is always advised that such document be made in with legal assistance. After all, the agent would be given authority over the things that we have worked for for most of our lives.
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Have you heard about ‘Power of Attorney’? Why do people have it? You may not know it now, but it could be what you need today. To begin with, the power of attorney is a legally effective document that states your agreement to give somebody else (a relative, a friend, or an employee) an authority to make special decisions or to do several things on your behalf. It is recognized in common law and civil law systems. It could be a legal or a business matter.
If you get a power of attorney for your own use, you could call yourself a ‘principal,’ a ‘granter,’ or a ‘donor’ (of power). The other person to whom you are intentionally providing powers or authority is called the ‘agent’ or the ‘attorney-in-fact.’ Take note that just because the term ‘attorney’ is used does not necessarily mean that you need to give an authority only to a lawyer. Your agent or attorney-in-fact could be of any profession, not necessarily a lawyer.
There are many things you should understand about power of attorney. First, execution of the power you bestowed does not mean you no longer have to make the decisions. Take note that the power of attorney just mandates your agent to act for you. For instance, if you are suddenly hospitalized even for a short period and you need to continue your important banking transactions, you need to get a power of attorney and appoint anyone you trust to do errands for you.
The agent should just follow your instructions or directions especially if you are still very much capable of making your own decisions. Thus, it is like you are just sharing your authority or power with another person. In the same way, you could instantly revoke the authority you gave your agent anytime you like especially if you think you are dissatisfied and are dubious about his or her performance of the duty you gave him/her.
There are instances when the power of attorney takes other functions. The authority usually provided by the legal services specifically for the elderly could be categorized as a durable power of attorney. It is somehow different from the usual and normal power of attorney used. ‘Durable’ simple means the agent is mandated to continue making decisions for the principal especially if the latter becomes incapacitated. However, the law states that the agent should be obliged to act only in the best interest of the principal. Thus, the money and properties involved must only be used for the benefit of the principal.
If you need to establish a durable power of attorney, take note that you are providing your agent the following authority: withdrawing your money from bank accounts and spending it; selling your property; and pursuing legal actions and insurance claims. If you are uncomfortable with the setup, you may decide not to get a durable power of attorney or any form of power of attorney at all. However, when you suddenly become mentally incapacitated, the court could appoint a conservator or guardian for you.
Power of Attorney Related Articles
- An Insight On The Different Types Of Power Of Attorney
- Choosing an Agent for your Power of Attorney
- Choosing The Best Agent For Your Power Of Attorney
- Essential Information about Durable Power of Attorney
- Frequently Asked Questions about Power of Attorney
- How an Agent in Your Power of Attorney should Manage Your Money
- How Much Power of Attorney Should You Give to Your Attorney-in-Fact?
- Important Considerations When Creating a Financial Power of Attorney
- Medical Issues And Power Of Attorney
- Power of Attorney 101
- Power Of Attorney And Its Validity
- Power of Attorney: A Brief Overview
- Power of Attorney: Should You Get One?
- Power of Attorney: What to Consider in Choosing an Attorney-in-Fact
- Preparing for Your Future? Consider a Health Care or Medical Power of Attorney
- Seven Steps in Preparing a Power of Attorney
- The Pros And Cons Of The Power Of Attorney
- Types Of Power Of Attorney
- Understanding The Power Of Attorney
- Watching It: Power Of Attorney And Problems}
- What Is The Durable Power Of Attorney For?
- What Power of Attorney Is
- Why Do You Need to Prepare a Power of Attorney?