Lambert: A Power of Attorney May Not Be the Answer to Your Problems

| June 27, 2015

Estate Planning

Bob Lambert, Valdosta Today Legal Contributor

For millions of people over the decades, the power of attorney has been an inexpensive way to give someone the right to act on another person’s behalf. But its power is not always absolute and when it fails, the consequences can be nothing short of disastrous.

Maybe your power of attorney isn’t so powerful after all. Well, at least not in some instances.

The New York Times reports in “Power of Attorney Is Not Always a Solution” that the very popularity of powers of attorney has led to an increasing difficulty in getting financial institutions to accept them. The problem is that powers of attorney can also be used to commit elder abuse and fraud. Banks do not want to get sued and as a consequence will refuse any power of attorney that is irregular. The New York Times article tells the story of a woman who went by her middle name but the document her brother signed giving her power of attorney used her first name. Banks were not willing to accept that she was the same person named in the power of attorney without hassle.

The article suggests that banks are more willing to accept revocable trust documents. Whether or not that is true depends on individual banks. Certainly banks will not refuse every power of attorney. An important takeaway, however, is to make sure that everything in your general durable power of attorney is accurate. For example, the person given the power should be named in the same way that he or she is on a government-issued ID.

General Durable Powers of Attorney are an important part of almost all estate plans. They provide a cheap and effective way for someone to designate a person to handle financial matters in the event of incapacitation due to an accident or old age. In fact when a proper power of attorney has not been executed, more often the family is faced with the time and expense of having a Guardian/Conservator appointment by the Probate Court. Unfortunately, we elder law attorneys are seeing too general, often too broad Powers of Attorney that are most frequently drafted by general practice attorneys, not skilled in the issues of aging, disability and Medicaid planning. Or even more frightening, those simply downloaded from the internet which we elder lawyers refer to as “license to steal”. So it should not be surprising when one encounters a financial institution or other not so willing to accept them.

For those of you who have attended my free seminars, classes or have had consultations with me know I always promote the power of attorney as the most important estate planning document, but only if prepared properly by a competent elder law attorney. For those of you younger than 49, maybe a very general power of attorney will work. However for my clients, most of whom are over 50, special provisions, language and powers are need to accomplish effective long term care planning. For those client, I prepare an “Advanced Planning Durable Power of Attorney. Since elder abuse is so prevalent, I encourage my clients to use accounting and notice provisions for checks and balances for agents. While many couple simply name their spouses as agent, that may not be the best choice depending on the age, health, and financial stability of the spouse. Special considerations before naming adult children must also be taken into account.

Please, if you are 50 are older, pull those old dusty power of attorneys out and let’s have a look at them. If you don’t have one, give me a call today to schedule an appointment to discuss your particular situation, and whether some other estate planning device may be more appropriate.

Please give me a call today at 229-292-8989 to schedule an appointment to discuss your estate planning, and long term care plans. Visit my website at www.legaladviceforseniors.com for more information or to schedule a free estate planning seminar for you and your church or civic group, or just you and a few neighbors and friends. You can also email me at legaladviceforseniors@gmail.com Be sure to sign up for my class this fall with Valdosta State University’s Learning in Retirement Program entitled: “Avoiding the Nursing Home for Baby Boomers.”

Reference: The New York Times (August 22, 2014) “Power of Attorney Is Not Always a Solution”


LambertBob Lambert is an Elder Law and Estate Planning Attorney who has practiced law in Valdosta for 25 years. His practice is focused mostly toward those Seniors who are 50 years of age and older where there is a need for advanced long term care planning. He utilizes a holistic approach which brings financial planners, home health care, assisted living and nursing home professionals and other experts together for comprehensive life care planning with the goal Medicaid eligibility when needed, asset protection and reallocation combined with traditional estate planning wealth transfer strategies.

An Alabama native raised in Texas, he received his B.A. degree from the University of Texas at Austin with a degree in Government and English, and his Juris Doctorate degree from the University of Mississippi where he graduated 4th in his class. He is a member of both the Georgia Bar and the Texas Bar; a member of the Elder law section of the State Bar of Georgia; and a member of the National Academy of Elder Law Attorneys including the Trust and Medicaid planning sections.

He regularly and eagerly provides complimentary seminars to civic groups, churches and other organizations on long term care planning and Medicaid eligibility. His primary focus is to help all seniors 50 years of age and older understand the necessity and importance, and implement , advance planning to preserve assets for enhanced quality of life in advanced age. More information can be found at his website where you subscribe to his weekly blogs on Elder law and estate planning issues at www.legaladviceforseniors.com.

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