The other day a client came into our Richmond office distraught. She spoke of how her elderly father had recently remarried and she was now worried about the woman he married. Ever since their marriage the father had become increasingly unaware of his environment and he was aging at a rapid pace. At the same time his new wife was transferring his property into her name, spending his money, neglecting to care for him, and shielding him from his family.
While this sounds like a nightmare scenario, unfortunately it is becoming all too common. You have probably read stories about Internet scams targeting the elderly, but an often overlooked and underappreciated scam is the abuse of the power of attorney. Even scarier is that in cases where power of attorney is abused the culprit is often someone closest to the elderly person. In fact it is estimated that in one third of all power of attorney abuse cases the suspect is a family member of the victim. This article focuses on what power of attorney means, how it can be abused, how to prevent abuse, and what to do when it is abused.
What is Power of Attorney?
A Power of Attorney is a legal document that gives one person the power to act of the other person’s behalf. The person who signs the document, or executes it, is called the Principal. The Agent is the person granted the power to make decisions on the principal’s behalf. Generally, the agent can make property, financial, and other legal decisions for the principal, but the powers may be limited depending on the circumstances. A power of attorney is not only useful in situations involving the elderly. For example, parents with children in college that are studying abroad often get power of attorney to manage their affairs while they are out of the country.
It is important to understand the distinction between a “Power of Attorney” and a “Durable Power of Attorney.” Under a regular power of attorney the agent loses his or her authority when the principal becomes incapacitated. This is a form of protection because incapacitated persons cannot monitor the actions of their agents. A durable power of attorney is similar, but with a key difference. A durable power of attorney is not revoked when the principal becomes incapacitated. For this reason, a durable power of attorney is what is often in place in situations involving the elderly because it was a purposeful part of estate planning. An agent with a durable power of attorney can take over managing the affairs of the elderly individual when they lose decision-making capacity. One other term to know is a “Springing Durable Power of Attorney.” This form of power of attorney goes into effect at a later date in time, when a specific event occurs. Contrast that to a standard power of attorney, or durable power of attorney, which become effective upon signing.
How is Power of Attorney Abused?
Unfortunately it is all too easy for power of attorney to be abused. In a typical scenario an elderly person is either hospitalized or entering a nursing home and knows that they will need assistance managing their affairs. They sign over a durable power of attorney believing they are giving the authority to someone they can trust. Unfortunately in many of these situations the person receiving the authority has their own motivations and they are not always acting in the best interests of the elderly individual. They begin to transfer title of property to their name and spend the person’s money on themselves. Sometimes the abuse is straightforward and intentional, but other times it is not. The family member taking over an elderly person’s finances and not spending sufficient money for that person’s care in order to increase their own inheritance is equally culpable. In other words, any time the agent spends money, or refuses to, in a way that does not comply with the principal’s wishes then power of attorney has been abused.
Though financial abuse of power of attorney is most common, other forms can be just as devastating. That is because power of attorney often applies to all types of decision-making authority, including medical. The type of care a person receives, where they go for the care, and the quality of the care can all be directed by the agent with the power of attorney. That can be a scary proposition when the authority is in the wrong hands.
How Can You Prevent Power of Attorney Abuse?
The good news is that you can prevent power of attorney abuse by being proactive and planning ahead. The most important method of prevention will be selecting the right person to be trusted with power of attorney. This might seem like an obvious solution, but often people wait until it is too late and they are granting power of attorney to their nearest relative or the first person that agrees to help. Thinking ahead of time can fix these issues and communicating with the person you choose can ensure they follow your wishes when the time comes. You must also regularly update any power of attorney documents to be sure they still comply with your current wishes.
An equally important step in prevention will be finding an experienced attorney that can assist in the preparation of your power of attorney documents. Many of the power of attorney documents printed off the Internet have no protections in place and are unclear with their guidance. An experienced attorney can put protections in place that limit the authority of the agent and ensure your wishes are complied with.
What Should You Do When Power of Attorney Has Been Abused?
If you or someone you know has already been the victim of power of attorney abuse there are a number of steps you can take in response. First, you should contact an attorney. If the victim has capacity the attorney can ask the court to revoke the durable power of attorney. If the victim is incapacitated the attorney can ask that a new guardian/conservator be appointed to replace the agent with durable power of attorney. The attorney can also take steps to recover property that was improperly transferred, or money that was stolen.
Another step to take is to contact the appropriate authorities. If you believe criminal acts have occurred it is best to contact the police. In other instances the best course of action is to contact the local Adult Protective Services agency. These agencies investigate claims of elder abuse and can take certain civil actions. For your convenience a list of local Adult Protective Services agencies is included at the end of this article.
Power of attorney abuse is a very real threat, particularly for the elderly. Taking the proper steps now can ensure you have a plan in place and a person you can trust when you need to transfer power of attorney. The elder law attorneys at Smith Strong, PLC have experience drafting power of attorney documents that include protections against abuse. Additionally, if you, or someone you know, has been a victim of abuse our office can help you put a new guardian/conservator in place. Please call one of our offices at 804-325-1245 (Richmond) or 757-941-4298 (Williamsburg).
Virginia Adult Abuse Hotline at (888) 832-3858, available 24 hours a day, 7 days a week
Adult Protective Services Contact Information:
Richmond: (804) 646-7405
Henrico: (804) 501-7346
Hanover: (804) 365-4100
Chesterfield: (804) 748-1100
Williamsburg / James City County: (757) 259-3115
Article co-authored by Attorney Van Smith