Defending Against Abuse of a Power of Attorney

Attorneys will advise you that you need to have an electrical of attorney. A Power of Attorney is an important document that allows someone else to handle your affairs if you have difficulty or are unable to do so. With age and illness, a Power of Attorney often becomes necessary. Usually the person who is given the authority to behave is going to do so with the most effective of intentions. What are the results, however, if the person you trust misuses the Power of Attorney for private gain or benefit? A Power of Attorney might seem like a simple document, but it might have far-reaching and unintended consequences. A Power of Attorney can be very tempting to the person who has it.


A Power of Attorney is really a legal document through which a person (the "Principal") gives someone else (the "Agent" or "Attorney-in-fact") the authority to behave on the Principal's behalf. If the Principal becomes ill, incapacitated or else unable to handle her financial affairs, or simply just chooses to let someone else take action for her, the person or persons she designated in the Power of Attorney can pay bills, deal with banks, lawyers and other professionals, and do other things that are in the most effective interest of the Principal.


A Power of Attorney could be general, meaning that it provides the Attorney-in-fact the authority to do long lasting Principal might do for herself, or limited, meaning it is limited in scope and/or time. For example, a Power of Attorney might be limited to one specified act or form of act, such as a limited Power of Attorney to go to a real estate closing and sign the closing documents with respect to a customer or seller, or it could be limited with time, such as a Power of Attorney that is effective only at that time that someone is out of the country on a trip. A Power of Attorney also might be durable, meaning that it takes effect upon its execution (or a specified date) and continues in effect even if the Principal becomes incapacitated, or springing, meaning that it takes only effect after the Principal is incapacitated (or various other definite future act or circumstance). The issue with a springing Power of Attorney is that it needs a judicial determination of incapacity for the power to take effect. This could take a large amount of time - as well as the initiation of legal proceedings, the hiring by the Court of an independent person to interview and investigate the circumstances of the alleged incompetent, and a hearing in Court - often exactly at a most trying time when there is an importance of prompt or immediate action.


In New Jersey, a Power of Attorney can include provisions regarding making healthcare decisions, including the power to consent to any medical care, treatment, service or procedure. A health care power of attorney is significantly diffent when compared to a "Living Will", which is a written statement of a person's healthcare and medical wishes, but does not appoint someone else to make healthcare decisions.


A Power of Attorney is really a useful and powerful tool. Unfortunately, just like many things, something with an excellent purpose still can be utilized for estate planning attorney improper purposes. An over-all Power of Attorney allows the Agent or Attorney-in-fact to do most situations the Principal could or might do herself. As a result, it could be an invitation to abuse and self-dealing.


The victim of Power of Attorney abuse often might not be aware of what's happening, as well as if she is may feel powerless to state or do anything because she is influenced by the abuser for care and companionship. The character and extent of the abuse might not arrived at light until after the person has died and someone else has the capacity to obtain use of her banking and other financial records.


Disputes can arise when the Agent or Attorney-in-fact has used the Power of Attorney to transfer the Principal's assets to himself or his family members. This can be done as an estate planning technique, such as for instance making gifts to make the most of the annual exclusion from gift taxes. On one other hand, it could be done to deprive other members of the family of a share of the Principal's assets which they otherwise might eventually inherit. For example, a person may wrongfully make use of a Power of Attorney to withdraw money from the Principal's bank accounts and deposit the money in his or own bank account. We've seen this and been involved with litigation to get the cash back.