Powers of Attorney and Avoiding Financial Abuse
For many individuals, the power of attorney can be a very useful tool for planning purposes due to its simplicity, convenience, and flexibility. A power of attorney is a legal document under which a person, referred to as the “principal,” appoints another person as his or her “agent” and gives the agent the authority to act for and on behalf of the principal. A “general” power of attorney terminates when the principal becomes mentally incapacitated, and a “durable" power of attorney continues after the principal’s incapacity.
However, powers of attorney can have their downsides. Powers of attorney may give the agent the power to sell a home or other assets, make investments, cancel insurance policies, name new beneficiaries, or change bank accounts. If the wrong person is named agent under the power of attorney, the agent could misuse the power of attorney and could divert your life savings to himself or herself.
The following conduct may indicate a misuse of the power of attorney, financial abuse or other form of breach of fiduciary duty:
- the agent opens joint accounts in principal’s and agent’s names’
- the agent transfers the principal’s assets to himself or herself
- the agent names herself or himself as beneficiary as the principal’s accounts
- the agent makes gifts to herself or himself
If you are aware of any misuse, financial abuse, or potential misuse or financial abuse of a power of attorney, we can help. Call Glover Russell, P.A. and let us help you prevent what may be lost or recover what was lost.