Durable Powers of Attorney – Part 1

Let’s start with the basics. A durable power of attorney is a document in which you can delegate certain powers over your financial life to another person or persons. While it takes effect immediately upon signing, it is most useful at a time when, for a variety of reasons, you can no longer act on your own behalf. In fact, what makes the power of attorney “durable” is the very fact that your agency can act for you when you, the principal, suffer from some disability. For the power of attorney to actually be “durable”, the document must simply state that the agent can act regardless of any subsequent disability of the principal, or words to that effect. Since there is a high probability that an older client may face such a period of disability, a durable power of attorney is one of the essential tools that must be implemented in any estate plan for an older adult.

Most of us may know this already, but what we do not know is the extent of ELDER ABUSE associated with durable powers of attorneys. We do know who the abusers tend to be though: known abusers are family members, professionals, caregivers and scam artists, who use the durable power of attorney for their own benefit and of the benefit of their principal.

Persons who are older and sicker are among the most vulnerable people in our society, especially those who become dependent upon their caregivers. As such, they have a dual problem; they are both a likely target for abuse and may be unable or reluctant to report such abuse. In fact, victims of such abuse may be threatened by their abusers with physical or emotional harm, or withdrawal of care, or may simply be unable to comprehend that they are being abused in the first place.

This problem of elder abuse through the misuse of a power of attorney is expected to grow as the population of frail elderly grows. This is especially true because we also expect the use of durable powers of attorney to grow. Why not, the durable power of attorney is the most simple and cost efficient method of handling a person’s finances. Moreover, they are very easy to obtain. Just click on to the internet or walk in any stationary store and you can have one in minutes. But perhaps they are too readily available.

Clearly, those who do not use legal counsel will be unaware of the document’s scope, limitations and potential for abuse. We’ll go into detail in a future newsletter.