Thanks to advances in medical and pharmaceutical technology, people are living longer. Sadly, not everyone gets to enjoy a long life free from disease, injury or mental deficiencies. Preparing for this eventuality often includes the execution of powers of attorney for finances and healthcare.
What are powers of attorney?
In short, powers of attorney allow someone else to act on behalf of an incapacitated person. The person appointed handles the incapacitated person's decisions.
What types of decisions does an agent make?
Powers of attorney can be broad or narrow. However, some of the more common powers given in a general power of attorney are as follows:
- Handle all financial decisions
- Recommend a guardian
- Make monetary gifts
- Make end-of-life healthcare decisions
With a power of attorney document, it can be restricted to include only decision-making power for health care decisions or financial matters, or both.
You need to be aware that, legally, the agent handling financial matters steps into the shoes of your elderly loved one. If given the power, the agent receives complete access to every asset and decides what to do with them. Left unchecked, your relative's assets could be misappropriated or squandered.
So, how are agents held accountable?
North Carolina's courts do not monitor the actions of agents. For this reason, powers of attorney often include language requiring the agent to keep detailed records of all actions, which then are provided to the principal or another trusted party for review. Further, restricting the amount of monetary gifts provides some measure of safety as well.
Powers of attorney should contain a set of "rules" or "instructions" regarding transactions. Giving an agent free reign with no restrictions sets the stage for abuse if the principal's trust was misplaced. You and other family members also need to remain diligent to ensure that the agent remains trustworthy.
My grandmother's agent made some questionable decisions. What can I do to protect her?
If your grandmother chose the wrong person to make financial decisions on her behalf, and you believe that her agent took advantage of her, talk to an attorney immediately. A review of financial statements and other documentation by your attorney could confirm your suspicions.
If necessary, taking legal action to remove the agent and appointing someone else to handle your grandmother's finances might be appropriate. Therefore, choose an attorney who routinely handles not only litigation matters, but guardianship and elder law matters as well so that you will not need more than one attorney to assist you.