New rules effective today aim to curb abuse of elders
September 01, 2009
By Morgan Thurston
Today, significant changes to powers of attorney take effect. A power of attorney is an instrument authorizing someone to act on your behalf and can be a very effective tool in the event of disability and incapacity.
However, prior to the current changes in the law, powers of attorney were powerful tools that also led to cases of financial exploitation and abuse. While underreported, the annual financial loss by victims of elder financial abuse is estimated to be at least $2.6 billion. In addition, financial elder abuse has been characterized by experts like J.F. Wasik as "the crime of the 21st century."
The statutory changes going into effect today are long overdue, and substantially remedy potential financial exploitation and abuse of the principal (the person granting the power of attorney) by the agent (the person getting power of attorney). The changes in the statute include:
· If the principal wants the agent to have the authority to make gifts, additional requirements must be met, including execution and witnessing of a "major gifts rider."
· Agents will now be subject to a "prudent person standard of care," with defined responsibilities. This requires keeping records (with receipts) of the agent's transactions.
· There is an optional provision authorizing the principal to appoint a "monitor" to request and receive records of transactions by the agent.
· The monitor, a government official and the guardian of the principal and other designated entities, may require the agent to provide the record of transactions and a copy of the power attorney on 15 days' notice.
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