Financial powers of attorney to protect people during extended emergencies. When the person is incapable of paying their bills or managing their resources due to a medical emergency, financial power of attorney can be helpful.
The agent or attorney-in-fact named in the documents can oversee resource management and the financial obligations of the incapacitated person. They can pay their bills or manage their small business.
Many people recognize that financial powers of attorney are useful, but they may worry about someone else abusing the authority granted in those documents. Appropriate restrictions added to financial powers of attorney can help prevent the misuse of authority and financial losses. What protective terms can people sometimes add to powers of attorney?
1. Nominating two or more co-agents
Typically, one person holds power of attorney and manages matters for an incapacitated party. It is possible to require that two or more people work cooperatively. This approach helps prevent scenarios where one person makes damaging decisions for their own benefit. Agents sharing authority can monitor one another’s choices and intervene if one agent attempts to do something for their own benefit instead of the protection of the principal who empowered them.
2. Requiring a lengthy incapacitation
Standard financial powers of attorney take effect as soon as a person becomes incapacitated. However, many medical emergencies are short-term issues that resolve within days. Some people protect themselves from the abuse of power of attorney by requiring that their medical incapacitation last a minimum amount of time before an agent can assume authority.
3. Limiting access and control
Powers of attorney do not need to provide carte blanche access to and control over personal resources. Principals can grant an agent the authority to access only one financial account or attend to specific financial needs. This approach helps protect high-value assets from inappropriate transfers or liquidation.
Adults adding financial powers of attorney to an estate plan may need support as they draft appropriate documents. Discussing financial needs and concerns with a lawyer can help people ensure they have protection when they need it the most. Custom language added to financial powers of attorney can protect people from abuses of power while they are medically vulnerable.
