How Can I Avoid Durable Power of Attorney Abuse?

 In Durable Powers of Attorney
durable power of attorney abuse

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I’m nervous appointing someone on my durable power of attorney since I understand it gives them complete power over my finances and legal matters. What can I do to make sure my agent doesn’t take advantage of me? Or that they simply make poor decisions?


You are right that a durable power of attorney is a powerful document and most give what is called “plenary” or comprehensive power to the agent or “attorney in fact” you appoint. It’s always best if you appoint someone in whom you have complete confidence. But not everyone has such an individual in their life. If you don’t, here are a few options that could make you feel more secure in your choice:

Springing Durable Power of Attorney

Most durable powers of attorney take effect immediately upon their execution. However, a “springing” durable power of attorney only takes effect upon your incapacity. You may wonder why all durable powers of attorney aren’t “springing” since in most cases they plan is for them not to be used except in the event of incapacity. The answer is that such a restriction can create problems. The document needs to be clear about how incapacity will be determined. If it requires a doctor’s certification, the agent will have to get this prior using the document. That will certainly delay things and may be difficult to obtain. In most cases, clients do not want to add this burden onto those the agent will already be taking on on their behalf.

Another advantage of not using a springing power of attorney is that if your agent begins to act on your behalf prematurely in your opinion, while your competent you can revoke the power of attorney and choose someone else to fill this role. If the document is springing, you’ll never have the opportunity to put them to this test.

Dual Agents

If you appoint dual agents, each can keep an eye on the other. However, this also can present some problems. The two agents need to communicate with one another. You have to decide whether they both need to act in every instance, which can be cumbersome, or either can act on their own, for which the legal term is “severally.” Finally, if you do not have one person you trust implicitly, you also might not have two. But, then again, you may have two people in whom you have some, but not complete, confidence. In such a case, a dual appointment may be the best resolution.

Professional Agent

You can also appoint a professional, such as an attorney or accountant, as your agent. This has the advantage that they will likely carry out the functions without violating any rules. It has the disadvantage of being more expensive since you would probably for their time by the hour. Although it’s rare, some professionals also violate their trust. Fortunately, in such a case you would be more likely to get your money back for several reasons: They or their firm are likely to have deeper pockets than an individual and be able to pay back in ill gotten gains. They may be insured. And the state may have a fund to pay back clients who have been cheated by their attorneys.

Revocable Trust

A revocable trust with a professional trustee can serve as a substitute for many of the functions of a durable power of attorney. Many law firms, banks and trust companies are set up to manage revocable trusts and do so quite well. However, they can only manage assets retitled in the name of the trust and have no control over assets outside the trust. So, in order for this to work, you would need to create and fund the trust now while you are able to do so. You can serve as your own trustee with the professional trustee in the wings in case they need to step in. Or you can name them as your co-trustee. The advantages of doing so include:

  • The opportunity to test them out and see how they will function in advance.
  • The opportunity to make sure they know you and your wishes and plans.
  • The professional money management they provide.
  • Back up for when you travel or are unavailable for other reasons, such as illness.

The disadvantage of naming a professional co-trustee is their fees and that you may feel a lack of privacy opening up your finances to others.

Even if you have a funded revocable trust, it will still be important to have a durable power of attorney as well so that someone can make legal decisions for you if necessary and take care of any financial or non-financial assets outside of the trust. However, if the trust is funded, those assets will be outside your agent’s control, meaning they will have less control and much less opportunity to abuse their status.

Limited Power of Attorney

You could limit your durable power of attorney so that your agent will have less power and control. We generally counsel against doing so because it’s difficult to know in advance what powers may become necessary. However, there are two areas where limitations are more common. The first is over gifting. Many durable powers of attorney are quite expansive in their gifting powers in order to enable the agent to take beneficial long-term care and tax planning steps. But others limit gifting powers so that the agent cannot deplete all the individual’s assets.

In more rare occasions, people execute durable powers of attorney limiting the agent’s power to funding the revocable trust. This would permit the revocable trust to be the main planning device and make sure that all assets can be transferred into when necessary, without giving anyone else indue power over your financial and legal decisions.


Another alternative is to provide for oversight. This can be done in a number of different ways. One is to require your agent to provide accounts of their activities to others. This is common in trusts, but not so common with durable powers of attorney.

Another would be to give others the opportunity to monitor your accounts on-line. Most financial institutions allow you to provide on-line access with whatever limitations you want to impose. The principal objection to taking this step is that you would need to set it up while you’re competent, which you might feel is an invasion of privacy.

Another approach is to use one of a number of new on-line services that offer on-line oversight of accounts. One is Carefull at It allows you to register your on-line accounts and determine what access others may have to view them. This can range from all activity to ask that they be given notice only in the event of an unusual transaction. Their service is automated to send out alerts in the event of unusual transfers or payments, as well as when payments are late, which can be a sign that the individual is losing some cognitive capacity.

For more information on avoiding durable power of attorney abuse, read this article on the website.

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