Power of Attorney Abuse is a Crime
Financial Elder Abuse by a POA or DPOA is More Than a Civil Offense
Aug 24, 2009
Powers of attorney (POA) are seldom overseen by courts or impartial third parties. This very lack of oversight makes it easy for an unscrupulous agent to abuse his or her trust and authority and turn a POA into a license to steal.
POA Abuse is Often a Crime Without Consequence
Victims of POA abuse, or their families, are often rebuffed by law enforcement officials and told, "It's a civil problem. Consult a lawyer who handles civil matters."
POA abuse is indeed a civil affair, but it is also a crime with real victims who deserve justice. According to the National Center on Elder Abuse, Administration on Aging, U.S. Department of Health and Human Services, while there have been successful investigations and prosecutions of POA abuse, many criminal justice professionals lack awareness of the roles they can play in holding offenders accountable.
Legal Definitions of Power of Attorney and its Associated Individuals
One who assumes authority under a power of attorney has the legal obligation of a fiduciary: to act in a trustworthy manner and to make decisions that are in another person's best interest or that are consistent with decisions the individual made for him- or herself before losing decision-making capacity.
- "Principal"– a person who authorizes another party to act on his or her behalf, usually on financial matters, through authority granted in a document: a power of attorney (POA) or its variants, the springing and durable power of attorney (DPA or DPOA).
- "Agent" or "Attorney-in-Fact"– the person who acts on the principal's behalf through a POA.
- "Power of Attorney" – a legal document by which the principal authorizes an agent/attorney-in-fact to act on the principal's behalf.
Differences and Distinctions: General POA vs Durable POA
Powers of attorney, both general and durable, become effective immediately upon creating the document and signing it. An agent/attorney-in-fact loses his or her general POA authority if:
- The principal dies.
- The principal revokes the authority.
- The principal loses decision-making ability and is therefore mentally incapable of revoking the authority. The law provides for this automatic revocation to protect incapacitated principals who can no longer monitor their agents/attorneys-in-fact or take action if and when agents abuse their authority.
A durable power of attorney is a POA that remains valid even when the principal loses the legal capacity to revoke the agent's authority. A durable POA is a useful tool for people who want to plan for the possibility of incapacity. For example, a durable POA could obviate the need to petition a court to appoint a guardian or conservator were the principal to become incapacitated. Durable POAs are often purposely written very broadly to give an agent/attorney-in-fact felxibility and wide latitude in handling the principal's financial affairs.
A POA's document title may not be definitive. If the language states the agent retains authority if the principal loses legal capacity or decision-making ability, a durable POA is in play.
Springing POA
A POA that "springs to life" and becomes effective only when some event occurs (or sometimes fails to occur) is called a springing POA. For example, the principal's incapacity may trigger the springing POA, and authorize the agent/attorney-in-fact to act in place of the principal.
Crimes Related to POA Abuse
An agent who violates the fiduciary duty owed to the principal may have violated one or more specific state and federal laws criminalizing financial exploitation of older persons, and/or criminal laws of general application:
- Exploitation
- Embezzlement
- Forgery
- Fraud–credit card, tax, welfare
- Larceny
- Money laundering
- Theft
Remedies for POA Abuse
Many communities have multidisciplinary teams of criminal justice specialists who review and redress elder abuse cases, investigate and prosecute cases, improve response and prevent victimization of older people. Often these professionals can freeze assets and prevent an agent from dissipating the principal's remaining funds, and seek restitution.* A FAST (Fiduciary Abuse Specialist Team) specializes in financial abuse which usually does not occur in isolation and is frequently accompanied by other forms of elder abuse or neglect.
*Brandl, B., Dyer, C.B., Heisler, C.J., Otto, J.M., Stiegel, L.A., & Thomas, R.W. Elder Abuse Detection and Intervention: A Collaborative Approach. New York, NY: Springer Publishing. 2007.
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