Estate planning lawyers will often prepare power of attorney documents for their clients. These documents designate an individual who will have the power to act on the principal’s behalf in financial matters. These powers are often very useful and appropriate. Elderly individuals who can no longer manage their own finances, who cannot take care of their own accounts, who cannot write checks, and who cannot otherwise manage the day to day financial issues that we all deal with, can certainly benefit from this planning tool. However, the power of attorney document also provides a huge amount of power to an individual, and that can be readily abused. One who has the agency power under a power of attorney document in some ways has a “license to steal.” The agent can quite easily and effectively turn the power into a sword to steal funds from the ward, for his or her own benefit. Because there is no direct court oversight of an agent with this type of power, it is easy for one to abuse the power and it is often difficult to stop the abuse.
Accordingly, before a power of attorney document is implemented, it is important to understand the power that is being given away and it is important to ensure, as best one can, that the individual obtaining this power is honest, truthful, and one who can be wholly trusted.
