Four Generations of Family
I’d like to start at the beginning with some terms. I’ve written about them before. . . .
A general durable power of attorney (POA) is an arrangement where one person (the principal) appoints another person (the agent) to act on behalf of the principal regarding matters specified within the scope of the POA. Under The Uniform Power of Attorney Act, which is Colorado law, powers of attorney executed after Jan. 1, 2010 are by default “durable” meaning it can survive the disability or incapacity of a principal. A POA is an important tool people can use to allow others to assist them in the event they need help managing finances. Another important detail of note is that the POA is also by default a “standing” power. “Standing” means that the POA can be used as soon as the document is executed by the principal. This doesn’t mean people rush out to use them. I usually tell my clients that I hope they never have to use these documents (or more accurately, that their agents will never have to use them) but they are ready to go if needed. Remember that one of the primary purposes for a durable POA is to keep people out of having to go to probate court for a protective proceeding like a conservatorship. One of my more important questions to a client when considering the use of a POA and who to name as agent concerns trust and accountability.
What is financial abuse of elders? It can occur on different levels, including; Inadvertent or careless behavior; negligent misuse of a position of responsibility (like agent under a POA); and intentional misuse or conversion of an elder’s money or property. Colorado’s new law will soon require certain persons to be mandatory reporters of elder abuse. In Colorado we have AARP ElderWatch, which is a partnership between the Colorado Attorney General’s office and the AARP foundation. You can get more information about that here.
What are Some Steps toward Prevention?
The National Criminal Justice Reference Service has a good and fairly up to date listing of resources about fraud and financial abuse of the elderly.
It is important to distinguish between types of elder financial abuse: by those scammers who are strangers looking for easy prey in the form of isolated, lonely, physically or mentally challenged or disabled elders; by adult children, grandchildren or other family members or friends who may be “impatient heirs” who may not be willing to wait until the elder dies to inherit from them. Temptation is simply too much for many people!
Transparency is another important safeguard for a principal and to help the agent understand there is both assistance and oversight available when needed. If the agent knows there is likely to be someone “looking over their shoulder” – whether it is another sibling, a professional, or a reporting requirement, this can encourage good habits on the part of the agent that benefit the principal. Other considerations include:
having another set of eyes watching bank and investment accounts
using a professional fiduciary as agent or for bill paying purposes
What makes financial abuse or exploitation of elders difficult to detect?
- Shame or embarrassment on the part of the elder, particularly when the abuser is a child;
- Elders often feel a loss of autonomy and have discomfort with vulnerability;
- Manipulation and Domestic violence type behaviors by person in control of the money; and
- The fragility of elder’s emotional and physical health.
Elder law attorneys typically have a network of people and both public and private resources that can assist an elder victim of exploitation or abuse. In a follow up to this post I will talk about the agent’s “job description” and fiduciary duties, along with some ways of detecting elder financial abuse.
©Barbara Cashman 2014 www.DenverElderLaw.org