Preventing Power of Attorney Abuse

The phone calls got shorter. Visits got less frequent. When you asked about your accounts, the answers were vague: “Everything’s fine, don’t worry about it.” But the heating bill went unpaid. Your medication ran out and no refill arrived. And somewhere along the way, $40,000 moved out of your savings account and into one you’d never heard of.

That isn’t an uncommon scenario—it’s financial abuse, the most common form of elder abuse. According to AARP, it costs seniors $28 billion each year. And sadly, most people don’t report the abuse when the perpetrator is someone they know. Understanding the warning signs and taking proactive steps can help families and older adults protect what matters most.

What is power of attorney

A power of attorney (POA) grants another individual the authority to make financial, legal, or medical decisions on the signer’s behalf. For example, this may include paying bills, collecting Social Security, or overseeing bank and investment accounts. While it’s an important planning tool, it can also become a vehicle for fraud if the person named to that role abuses the trust placed in them. Abuse can go undetected for months or years. Red flags include:

• Unexplained withdrawals or changes to account beneficiaries
• Bills going unpaid despite sufficient assets
• An agent becoming defensive or secretive about finances
• The older adult being isolated from other family members
• Sudden changes to wills or estate documents following a health decline

The good news is that abuse is preventable when families and older adults take deliberate precautions, such as:

Choose your agent carefully. The most important decision in any POA arrangement is selecting the right person. An agent should be someone with integrity, financial competence, and a genuine commitment to the principal’s well-being. Consider naming a professional fiduciary, an attorney, or a trusted institution if no suitable family member or friend is available. Naming a co-agent can also reduce the risk that one person acts improperly.

Limit the scope of authority. A general durable POA grants sweeping powers, but a limited or special POA can restrict the agent to specific tasks or include certain prohibitions. Work with an elder law attorney to tailor the document to your actual needs. Built-in constraints are easier to enforce than trying to undo things after the fact.

Build in oversight and accountability. Require the agent to keep detailed records of all transactions and provide regular updates to a third party, such as another family member or an attorney. Set up account alerts through your bank that can notify a (separate) trusted contact. Consider naming a monitor, someone who has the right to review the agent’s actions but cannot make decisions themselves.

What to do if you suspect abuse

If you believe a POA is being misused, act quickly. The earlier abuse is reported, the greater the chance of recovering lost assets. Contact Adult Protective Services (APS) in your state, which investigates reports of financial elder abuse. An elder law attorney can petition a court to revoke the POA, demand accounting, or seek restitution. Some states also allow concerned family members to file for guardianship or conservatorship to remove a harmful agent.

Power of attorney abuse thrives in secrecy and inaction. The best prevention is careful planning, open family communication, and regular oversight. With the right precautions in place, a power of attorney can remain what it was always intended to be: a compassionate tool for protecting those we love.