Being granted POA allows a person (usually a trusted friend of family member) to make legal, medical and financial decisions on behalf of an elder. It is widely considered advisable for aging adults to appoint a POA, before their health begins to decline.
However, the issues surrounding POAs are complex and can thus be easily misunderstood, or exploited.
In the above situation, Janice initially used her POA to “gift” her parents’ house to herself—a move that the court eventually deemed illegal, given the specifications of the document that granted her authority to make decisions based on her parents’ behalf. However, since the statute of limitations for John to refute his daughter’s claim on the property had already passed, Potter was unable to reclaim the deed to his house.
Gifts of property, assets and money are sometimes allowed in POA arrangements, if spelled out in the document ahead of time. And, there are a variety of protections that can be built in to an agreement, to protect an elder from potential abuse by their appointed POA.
The benefits of trusts
An alternative to designating a financial POA is for a person to place her assets in a trust and appoint an individual (known as the “trustee”) to manage those assets. POAs and trustees have similar decision-making authority.
A trust may be a safer alternative for some, since it’s easier to hold a trustee liable for the decisions they make on an elder’s behalf than it is to hold a POA responsible, according to Buckley Fricker, J.D., G.C.M., a geriatric care manager and president of Buckley’s for Seniors, a companion care company for elders. “For anyone who has even the slightest doubt about whom they are naming to be ‘in charge,’ it is worth at least checking with an elder law attorney to see if a trust would be appropriate in their case,” she says.
Trusts allow for very precise language about safeguarding an elder’s assets. There are also state-specific laws that strictly regulate trusts, even those with ambiguous language.
In the case of John and his daughter Janice, for example, Fricker says that placing the deed of the house into a trust and then outlining the specific rules governing the handling of the deed might have prevented Janice from illegally seizing her father’s house.
Planning ahead requires an individualized approach
There’s no one-size-fits-all approach when it comes to planning for an elder’s future.
Family members tasked with helping an aging loved one make long-term care and end-of-life arrangements may benefit greatly from the input of an elder law attorney. These legal professionals can provide guidance on whether an elder would be better off appointing a trustee, or a POA to manage their assets; as well as a host of other legal issues.
Ultimately, the most important thing is to plan ahead, whenever possible. This means making sure that a loved one (and you, yourself) have prepared the following, must-have legal documents:
- HIPPA authorization
- Power of attorney (both medical and financial)
- Advanced Healthcare directive
- A Will
Without such safeguards in place, elders and their families could potentially be exposed to unnecessary strife when making important medical and financial decisions. For more information on each of these essential documents, consult AgingCare.com’s Money and Legal section.
Power of Attorney Nightmare Has 91-Year-Old Man Facing Eviction by His Daughter originally appeared on AgingCare.com.