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POWER OF ATTORNEY
SPECIAL MESSAGE FOR DCSD CLIENTS ABOUT POWER OF ATTORNEY DOCUMENTS TO ENSURE RELATIVES DON’T RIP YOU OFFFrom: Jerome S. Lamet, Supervising AttorneyEvery senior should consider signing a power of attorney in case they have difficulty dealing with their affairs. But it is important that the power of attorney document protects you and your estate from the abuse of those who might want to take advantage of you. Here are some facts about a Power of Attorney Many lawyers say older people are often making use of a tool known as a durable financial power of attorney. This legal document authorizes an agent-usually a spouse, another family member, or a trusted adviser-to make financial decisions if you become unable to make them yourself. But naming someone to take control over your money has the potential for serious abuse, and lawyers are increasingly devising strategies to help safeguard their clients. Among the tactics: Lawyers are including provisions requiring regular accounting statements from agents. They also are naming co-agents who can serve as checks on each other, or naming a supervisor who has the power to fire an agent. People want to make sure when they sign the document that they do what they can to protect themselves, when the power of attorney takes over you’re usually no longer in a position to supervise it. When setting up a power of attorney, you want to name an agent while you’re still in good health and can make clear decisions. Typically such documents are included as part of a standard estate-planning package, which also includes a will and health-care proxy giving an agent the power to make health decisions when you can't. It’s important to designate someone trustworthy, since the agent has wide latitude over your finances. Because a power-of-attorney arrangement is a private agreement between you and your agent, there is no court supervision. What I tell people is that if you don’t trust someone one thousand percent, don’t grant them power of attorney. Power of attorney are often a tough balancing act: You want them to be simple for trusted family members or friends to implement, without too many hoops each time a transaction is made. But you also want to avoid giving agents a license to steal. To further protect yourself, you can require that your agent provide family members, or a third party, such as a lawyer or accountant, with regular accounting statements. Another strategy is to name co-agents. While that can be a burden many transactions, for instance, would need two signatures it can also create a system of checks and balances. In some cases, lawyers appoint an additional safeguard: a “protector,” who has the power to replace the agent if there is wrong - doing. Another key point: Make sure to carefully lay out exactly what powers you want your agent to have. For instance, you can limit the agent’s power to make gifts of your property, so they can’t just give money to themselves. Spell out under what conditions gift can be made, how much and to whom. Power-of-attorney laws differ from state to state, so make sure your lawyer is familiar with what your state allows. Rules also can vary by financial institution. Lawyers say banks are increasingly scrutinizing power-of-attorney documents or are reluctant to honor them, because they fear being subject to suits alleging they unwittingly helped an account be drained by an improper agent. There are two main kinds of power-of-attorney documents. If you’re using a “springing” power-of-attorney document, which goes into effect only when you are declared incapacitated, make sure to carefully specify how you are to be deemed incapacitated. You can ask, for instance, that your agent get a second opinion to make sure you really are unable to handle your own affairs. A non-springing power-of-attorney document, meanwhile, goes into effect immediately upon signing. That can be useful in a case where an agent wants to immediately take control to stop, say, abuse by a neighbor or caregiver, without waiting for a doctor’s declaration of incapacity. You really need to trust your agent to do a non-springing power of attorney. There is some recourse if your agent is accused of financial impropriety. Another loved one can petition a court to name a protective guardian or conservator. Typically, court-appointed guardians can be another family member or a third party, such as a lawyer, a bank, a social worker or a specially trained professional guardian. Once a guardian is appointed, he or she then has legal standing to sue the agent to try to recover funds. Also, if you sense wrongdoing, contact your local district attorney’s office, many of which have elder-abuse units, and let them investigate. Unfortunately, when people have authority over money, sometimes very bad things happen. Planning Ahead Here are some steps you can take to help safeguard your financial power-of-attorney document:
If you wish to have DCSD’s attorneys prepare a power of attorney for you it will cost $1,000. You can arrange with our finance department for reasonable monthly payment to be added to your monthly payment to be added to your monthly fee payment to pay for the power of attorney. If you have any questions about power of attorney call DCSD and ask to speak to the legal department. |
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