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Abuse of Seniors - Power of Attorney is Rampant

Elder abuse lawyers at Pintas & Mullins announce that Minnesota legislators recently passed a bill, going into effect August 1, 2013, that amends some of the laws regarding power of attorney. Advocates say abuse of power of attorney contracts is rampant, and several states have already strengthened their power of attorney laws in response.

An article in the StarTribune highlighted some of the possible abuses of power of attorney, which gives an agent the legal authority to sign someone else’s (the granter) name, on anything from checks to real estate to beneficiaries. Power of attorney laws were intended to help those who are incapacitated and their families, such as deployed military personnel and the elderly.

Unlike the more legitimate conservatorship laws, which require a court appointment and supervision, power of attorney forms may be downloaded directly from the internet and come with very little oversight. Abuse of such contracts is not, unfortunately, all that uncommon, and in Minnesota, legislators are fighting back with increased rules and regulations.

The Florida legislator recently adopted similar changes to its power of attorney laws, which significantly reduced the broad powers given to power of attorneys. Under prior Florida law, as with that in Minnesota, it was common for the language to be far-reaching and general, such as authorizing agents to take “any action not otherwise mentioned… or that I could take myself.”

The amended law omits such broad language, allowing the agent to exercise only specific powers. New Florida laws also disallow agents to execute or revoke wills and perform contracts under which the incapacitated person would provide personal services.

The change of language in Florida, Minnesota, and several other states’ power of attorney laws are intended to prevent fraudulent behavior and scams, which have been estimated to cost our nation’s seniors nearly $3 billion every year. In power of attorney scams, agents may claim the money they are taking is for “safekeeping,” or because the senior needs to be “protected” from making bad economic decisions.

Although these scams can be orchestrated by strangers, more often than not the scammer is a close friend, neighbor or family member. A senior living alone may need to be hospitalized for a few weeks and grant power of attorney to a distant nephew to pay their bills on time. The nephew may ask the senior to sign a power of attorney, empty their bank accounts and investments, steal their social security checks, and then simply leave the area.

Strangers typically prey on seniors with severe cognitive disabilities, such as dementia or Alzheimer’s. The StarTribune article noted a case of a man with dementia in a nursing home who gave power of attorney to a stranger without ever telling his wife. The stranger then paid herself generously from their joint accounts.

As the baby boomers age, many states are seeing a massive increase in senior citizens requiring care, and vulnerable-adult advocacy groups are asserting the need for changes in many laws, including power of attorney. The Minnesota changes will require agents to keep careful records of where the money they take goes, as well as provide records if asked and face liability if power is abused. The granter may also recover costs in the event the agent fails to provide financial records.

Some liken the changes to “speed bumps,” with new, cautionary language requiring the granter to make affirmative decisions. One such decision would be whether or not to allow an agent to self-gift from their accounts, taking money for themselves or their children. The old laws allowed this, if the agent so wished, without any restrictions. Now, the granter must check a box and write the names of those, if anyone, who may self-gift. The new contract also sets a maximum amount for gifts.

New language also makes the specific powers of the agreement much more clear, making it less likely the power of attorney will be used fraudulently. The law now states that agents must act “with the interests of the granter utmost in mind.”

Nursing home abuse lawyers at Pintas & Mullins highlight a study by Cornell University which found that for every one case of elder abuse reported, about 24 go unreported. If you or a loved one was exploited financially, the person responsible may be criminally charged for the abuse, and it is important to act quickly.