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3 ways power of attorney can be abused

On Behalf of | May 14, 2024 | Elder Law, Estate Planning |

When planning for unforeseen circumstances such as incapacitation or illness, establishing a power of attorney is crucial to designate someone to make decisions on your behalf. However, these individuals entrusted with this power of attorney may sometimes abuse it, leading to unintended consequences.

If you are considering granting power of attorney, it’s vital to carefully select a trustworthy and responsible individual, and to regularly review and monitor their actions to prevent potential abuse of authority. Here are some of the ways power of attorney can be abused.

1. Financial mismanagement

An individual entrusted with power of attorney may exploit their authority by engaging in financial mismanagement. This can manifest in various ways, such as unauthorized withdrawals from bank accounts, improper handling of investments or neglecting to pay bills and taxes on behalf of the principal. They may also fail to keep accurate records of financial transactions or intentionally conceal information about the principal’s assets.

2. Fraudulent actions

In extreme cases, individuals with power of attorney may resort to fraudulent actions to exploit their authority. This could involve forging signatures on documents, altering financial records or fabricating transactions to siphon funds from the principal’s accounts for personal gain. Furthermore, the agent might deceive the principal into granting additional powers or signing documents under false pretenses.

3. Neglect

Another example of power of attorney abuse is neglecting the welfare and best interests of the principal. This can occur when the appointed agent fails to fulfill their duties to provide proper care and support for the individual under their authority. Neglect may manifest in various forms, including ignoring the principal’s healthcare needs, neglecting to ensure their living conditions are safe and suitable or failing to advocate for their rights and preferences.

Legal guidance can help ensure the power of attorney document has safeguards.