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The Benefits and Dangers of Power of Attorney in California

A Power of Attorney (POA) is a legal document that establishes a relationship between two people, a principal and an agent. The principal is usually an elderly, ill or disabled individual. The agent may be a trusted relative or friend. The POA allows the agent to make powerful legal, financial or medical decisions on behalf of the principal.

The agent will have access to finances, property, medical, and personal information in order to make informed decisions for the principal. POA’s are intended to ensure a principal’s desires and wishes will be carried out when they can no longer make coherent decisions themselves.

Many times, the agent makes good decisions for the principal and doesn’t abuse the POA. But, as you may imagine, there can also be great potential for abuse of the POA. Firms that practice estate litigation in Santa Barbara, CA often see cases after the principal’s death where the POA has been abused and the estate has been squandered by an unscrupulous agent.

What are the types of POA in California?

Under California Probate Code §4129, there are two types of POA, an immediate POA or a springing POA. As the name implies, an immediate POA becomes effective immediately upon signature. A springing POA will only go into effect when a certain condition is met, so the agent won’t have any legal rights to act for the principal until that condition is met.

Under California Probate Code §4124, the springing POA is durable, meaning the agent will retain all the powers and rights of the POA through the principal’s incapacity. All POA’s expire upon the death of the principal.

Three Power Grants for POA

The POA has three power grants: it may be a general one for all decisions, for healthcare only or limited, meaning it will only be in effect for certain types of decisions or a certain event, such as a business decision. The POA must be signed with two witnesses older than 18 while the principal is still legally of sound mind.  

The Dangers of POA as Seen by Estate Litigators in Santa Barbara

Sadly, there are many ways a POA can be abused when the agent makes decisions to benefit themselves instead of doing what the principal intended. When the agent embezzles funds or decides to use them for their personal gain, rather than for the principal’s needs, that constitutes financial abuse of a POA.

Since the agent has full access to the principal’s accounts and personal information, it’s very easy for dishonest ones to open credit cards, purchase insurance or open bank accounts in the principal’s name. The agent could also change the principal’s estate or beneficiary designations without the principal’s knowledge, consent or wishes.

Additionally, they could make harmful and inappropriate medical decisions on behalf of the principal. They might place them into assisted living or nursing homes against their wishes or not place them in the appropriate medical facilities when needed. There are numerous potential medical abuses of the POA.

Who Oversees POA relationships?

Sadly, there is not a lot of oversight in POA relationships. Many times, the financial or medical fraud is revealed only after the principal’s death when the estate needs to be settled and it is too late to recover stolen funds and property.

Elders are unfortunately vulnerable to POA fraud and abuse. Sometimes a trusted family member isn’t trustworthy and makes poor or dishonest decisions. Some elders without family may find a paid advisor to take the POA, who then goes on to commit fraud and abuse.

POA abuse is illegal and punishable by both federal and California state laws. If it is caught in time, there are ways to revoke a POA that involve the court and judges, which can be a lengthy and expensive process, but it can be accomplished.