Lawyers do lots of things that people think are “boiler plate” and simple. From the client perspective these activities are easy and should remain easy – “Don’t over lawyer it.” One of these so called “easy” things is the Power of Attorney and if ever there was an instrument that should lawyered to death it’s the Power of Attorney.
A Power of Attorney is a document that is signed by a person, called the “principal” which grants another person, called the “agent” or “attorney in fact” the authority to conduct business on behalf of the principal.
Most commonly POAs are drafted for older people who may not as mobile as they once were. Depending on the POA, the agent can be allowed to do anything from borrowing money to selling property to writing checks. Over the past several years, as a result of a great deal of fraud, Maryland and many other states have revisited their POA laws. Not only states but many banks have their own specila requirements.
In Saturdays’ Wall Street Journal, the link is posted below, the Journal examined the various laws regarding powers of attorney and provided its readers with important do’s and don’ts relating to the POA. I strongly urge you to read the article and make sure you heed its recommendations. But mostly make sure that your lawyer really takes time to meet your needs when drafting this important and dangerous document. This is not a “do it yourself” legal document and you should get a lawyer to advise you.
What happens when a principal abuses his or her power? Is the victim, or in many cases, the victims heirs up the proverbial river? The answer is never easy and always based on the facts of each case.
So for example: A mother grants her nurse a POA to conduct her business; simple things like banking and paying bills. But the POA is a broad POA and has language that reads “the agent may transact any and all financial business including borrowing money,…” Nurse goes out and buys a new Rolls Royce titled to nurse on mom’s credit, making the payments from mom’s bank account.
Mom dies and her children discover what nurse did. Do the heirs have any recourse? Should they? What happens to nurse and the new Rolls? Some answers after your thoughts.