Abuse of Power of Attorney49

A general power of attorney appoints one individual to act in place of, or on behalf of, another person. For example, a homebound elder person may grant a power of attorney to a family member to conduct transactions at the bank on his or her behalf. A durable power of attorney continues after the principal loses decision-making capacity. The power may become effective when signed or may be a “springing power of attorney” that takes effect at a specified future time or on the occurrence of a specified future event or contingency (e.g., the incapacity of the principal). States have enacted a range of statutes to punish those who abuse powers of attorney (Brandl and Meuer, 2000). The misuse of a power of attorney has been explicitly classified as a theft (Arizona), a violation of an elder adult abuse statute (Utah, Montana, Nevada), an embezzlement (California, Oklahoma), and an exploitation of an infirm individual (Louisiana) (Thilges, 2000).

A durable power of attorney provides a simple, easily implemented, inexpensive tool for providing financial assistance to the elderly, but it is also subject to abuse (Nerenberg, 2000c; Weiler, 1989). Indeed, abuse of the durable power of attorney has been called an ”invisible epidemic,” a “license to steal,” and the crime of the 1990s by practitioners who work with the elderly, in part because of the ease with which people can obtain and misuse durable power of attorney authority (Coker and Little, 1997; Hwang, 1996; Weiler, 1989).50

Among the abuses of powers of attorney that have been identified are having a power of attorney signed by a person who has a cognitive impairment at the time, using the power after it has terminated (e.g., the principal becomes incapacitated and the power is not a durable power), or using the power for purposes beyond those for which it was intended (Nerenberg, 2000c). The law generally presumes that the agent has the principal’s permission to transact whatever business the document authorizes and unless the victim is able to testify, which is often not possible, it is difficult to prove otherwise (Hwang, 1996). It has been noted that few states require any type of registration by an agent, there are no mechanisms to ensure the principal has mental capacity at the time of signing or has not been coerced into signing, elders may not realize the extent of the authority they are

49  

For a discussion of civil remedies available when a perpetrator has occupied a fiduciary status in general, see Moskowitz (1998b).

50  

A 1994 survey of attorneys and service providers for the elderly found that two-thirds of the 410 respondents reported cases of abuse of the durable power of attorney and 38 percent knew of five or more such cases (Sacks, 1996).



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