A durable power of attorney is one of the most important estate planning documents you can create, but it is also one that can be misused. While it isn’t possible to entirely prevent the possibility of abuse, there are steps you can take in drafting the document to greatly reduce the chances.
A power of attorney allows a person you appoint — your “attorney-in-fact” or “agent” — to act in place of you – the “principal” — for financial purposes when you want or need such assistance, and if you ever become incapacitated. The phrase “durable” power of attorney means the power of attorney will continue to have effect even if you become incapacitated. In that case, the person you choose will be able to step in and take care of your financial, legal and business affairs. Unfortunately, if the agent chooses to exploit the principal, a power of attorney in the wrong hands or with too much power can be very bad news. The following are some ways to draft a power of attorney to prevent someone from taking advantage of you.
Trustworthy agent. The most important thing you can do is appoint a trustworthy agent. Think carefully about whom you want acting on your behalf. You need to appoint someone you trust to have your best interests in mind. If you do not have any friends or relatives who are appropriate, you could hire a professional fiduciary. A professional fiduciary can be a bank with trust powers, a certified public accountant, or a trust company. Another option is to have multiple agents, which allows more than one person to share the responsibility and permits them to divvy up tasks. Requiring the co-agents to act together provides checks and balances, but it could become very cumbersome if all of your agents have to sign every check or other document.
Second signature. If you don’t want to have co-agents, but you want a check on the agent, one option is to require two signatures for large transactions. The power of attorney document can set rules on what transactions would require an additional person to sign off on them.
Backup agent. In addition, to having a trustworthy agent, it is a good idea to have a backup agent in case the first agent becomes incapacitated or no longer wants to serve as agent. If you do name alternates, make sure the document is very clear about when the alternate takes over and what evidence he or she will need to present when using the power of attorney.
Third-party accounting. One way to prevent an agent under a power of attorney from exploiting the principal is to require the agent to provide an accounting to a third party. The third party could be a family member or a friend. It doesn’t have to be a formal accounting; it can be a summary of the financial transactions. The power of attorney document can provide the details on what information needs to be provided to whom and how often.
Limit powers. The durable power of attorney can provide detailed instructions on the various powers the attorney-in-fact may carry out. You can make it as broad or as limited as you want. For example, you can allow your agent to pay bills, but not to change your will. One of the most important powers in the power of attorney document is the power to gift. One way to prevent abuse is to strictly define when gifting is allowed and how much the agent can give.
Review the choice. Every few years, you should review your choices in case something has changed. Don’t be afraid to revoke the power of attorney if you are no longer happy with your choice of an agent.
Because of these drafting choices, it is a good idea to have an experienced estate planning or elder law attorney draft the document for you. As experienced elder law attorneys, we can help you decide how to best protect yourself or a loved one. If you need a power of attorney for finances quickly, or one that doesn’t need anything more than the basic language (such as when you need a power of attorney for finances that allows you to establish a qualified income trust – you may find a Florida compliant power of attorney at this website).
If after you have a durable power of attorney in place, should your agent abuse the power of attorney, you may have recourse against the untrustworthy agent. Florida law provides a legal cause of action against someone who has abused a power of attorney, or otherwise financially exploits the elderly person. Florida Statutes, Section 772.11 . The statute allows the party who was injured – you – to file a lawsuit against the agent. You can recover your financial losses, as well as your attorney’s fees and punitive damages. The court is authorized to expedite the trial of the claims against the defrauding agent.
Florida Statutes also allow you, or your family, to press criminal charges against the agent who abused your trust. Florida Statutes, Chapter 825 makes financial exploitation of an elderly (sixty or older) person in Florida is a first degree felony. The abusive agent can spend from 15 to 30 years in prison. You also can get a preliminary injunction against someone who is financially exploiting an elderly person in Florida. That action can help stop the abuse before it becomes even worse. You don’t need a lawyer (though one probably would be able to help you move more quickly) to bring the injunction action against the perpetrator of the financial abuse. These laws apply to all fiduciaries like the agent under a power of attorney, the trustee or co-trustee of a revocable living trust, and anyone who has a close relationship with the abused elderly adult.
If your need for a power of attorney for finances is immediate, and related to the need for you to have a Florida compliant power of attorney so you can prepare a qualified income trust for a family member, you can obtain such a Florida compliant power of attorney for finances – Prepare Your Florida Durable Power of Attorney Online, Right Here, Right Now .