In my many years of practice, I’ve always advised current and potential clients that Durable Powers of Attorney are very powerful and potentially very dangerous documents. Durable Powers of Attorney allow a person to designate and authorize someone else to act on their behalf in managing their financial affairs (such as investment accounts) and making healthcare decisions for them. In the wrong hands, they can ultimately be used to negate the client’s overall intent.
In the case described below, the husband’s financial power of attorney actually trumped his Will (or at least his intent) because the power of attorney allowed his wife to put her name on his investment account and allowed her access to the funds for herself instead of to his kids. The court held that while the husband really wanted the proceeds to go to his kids, the power of attorney controlled because the power contained in the DPOA (which was signed at the same time as his Will so undue influence wasn’t an issue) allowed her to change the name on a future account.
The lesson here is that care needs to be taken as to how much authority is given in these documents. The amount of authority can either be very broad (it covers nearly everything) or very narrow (it only applies to certain matters and in certain events). And the person designated must be someone that can be trusted not to abuse their power and authority. It could either be a family member or close friend. Lastly, don’t just sign one because someone says you have to – this would include a bank or other financial institution. These companies prefer that you sign their forms because they have been drafted and approved by their own in-house attorneys.
If you are concerned about a power of attorney handed to you or otherwise need to have a power of attorney drafted in accordance with your ultimate goals and wishes, please contact my office to schedule a review or discussion.