If you have been appointed in my aging parent’s Power of Attorney, what do I do when the time comes. Cash-out and head for the hills? Hopefully not, but rising to the occasion to serve as you have agreed can be a significant challenge.
However, sometimes the elderly can misunderstand exactly what that entails, especially when it comes to the person’s authority given decision-making powers, or regrets agreeing to sacrifice control.
The person appointed (called the agent or attorney-in-fact) is also typically an adult child. Nevertheless, they may be unaware of the appointment or do not grasp what is permitted and when it is permitted. It cannot be obvious.
Forbes’s recent article entitled “Let’s Get Clear: What Does It Mean To Be Appointed Aging Parents’ Power Of Attorney?” provides the answers to three frequently asked questions of many heard from families.
Question: Can my father, who’s in charge of our family finances but now has dementia, revoke his DPOA that he signed years ago and name a child to take over managing his money when he needs help?
Answer: Perhaps. If Dad has dementia, he needs to be evaluated by a doctor to see if he still has the capacity to make financial decisions. This is a legal determination with help from doctors, particularly psychologists, who can evaluate and give standardized test results. If the parent is found to have sufficient mental capacity, he is permitted to revoke the durable power of attorney at any time. However, if he doesn’t have that ability, he’s no longer legally capable of revoking the document.
Question: What if my mother is found to be incapacitated for financial decisions? If I’m the appointed agent on the Durable Power of Attorney (DPOA), when can I use this authority?
Answer: Provided you’ve met any requirements detailed in the DPOA document itself, you can immediately take over financial authority. Some durable power of attorney provides “springing” authority and requires that a doctor or even two doctors must say the parent no longer has capacity before you can act. Some durable powers of attorney say the document is effective immediately. The agent’s authority is activated based on what is contained in the document.
Question: Am I allowed to keep my father from recklessly giving away money or making imprudent decisions with his wealth if I’m the appointed agent on his DPOA?
Answer: Yes and No. Usually, the durable power of attorney gives the agent full authority over all financial matters. However, moving funds to protect invasion by the person how signed a power of attorney brings up thorny issues of capacity, control, and protecting, and the lines are often blurry.
To act within your authority, meet with an estate planning attorney and understand the boundaries of what you should and shouldn’t do.
Reference: Forbes (June 22, 2021) “Let’s Get Clear: What Does It Mean To Be Appointed Aging Parents’ Power Of Attorney?”
Suggested Key Terms: Elder Law Attorney, Capacity, Power of Attorney, ElderCare