Protecting a Power of Attorney from Abuse

An attorney will tell you to have a power-of-attorney. A Power of Attorney allows another person to manage your affairs in the event that you are unable or have difficulties. A Power of Attorney is often necessary due to illness and age, extra resources! Most people who are given the power to act will do it with the best intentions. But what happens if the Power of Attorney is misused by someone you trust for their own benefit or personal gain? Although a Power of Attorney might seem simple, it can have unintended and far-reaching consequences. The person who holds a Power of Attorney may find it tempting.

A Power of Attorney allows a person (the Principal) to give another person (the Agent or “Attorney in-fact”) the power to act for the Principal. The Power of Attorney allows the Principal to pay her bills, deal directly with banks, lawyers, and other professionals if she becomes incapacitated, ill, or otherwise unable to manage her finances.

A Power of Attorney may be general in that it allows the Attorney-in­fact to do anything the Principal might want. Or it can be limited and limit the scope and time. A Power of attorney may only be used for a specific act or type of action, such as to sign closing documents for buyers or sellers at a realty closing. Or it could be limited in time and be effective only while the principal is away on a trip. Also, a Power of Attorney may be permanent, meaning it takes effect on its execution or a specific date and continues to apply even if the principal becomes incapacitated. Or, it could be springing, meaning it only takes effect after the Principal dies or some other definite future event or circumstance. A springing Power of Attorney requires a judicial determination of incapacity before it can take effect. This can be a time-consuming process that may result in legal proceedings being initiated, the hiring of an independent person by the Court to interview and examine the circumstances of the alleged incompetent and a hearing before the Court. These are often times when the Court needs to take immediate or prompt action.

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