Many court cases and commentaries have focused on the use and problems associated with a Power of Attorney. In New York Article 5, title 15 of the General Obligations Law contains the statutes regarding a Power of Attorney (GOL Section 5-1501 seq.). The Power of Attorney can be a useful means by which a person can designate an agent to help with financial matters. A Power of Attorney should not be confused with a Health Care Proxy which is provided for by Public Health Law Section 2981. A Health Care Agent is limited to only health care decisions.
The issues that arise with agents or attorneys in fact who are named to make financial decisions is typically two-fold. First and foremost is that the agent may abuse his power over another’s finances and either act in manner that is not in the principal’s best interest or act in a manner to take advantage of the power for the agent’s self-interest. The second issue that often arises is that the agent fails to make or keep an accounting of his actions and transactions. As a result, financial decisions and payments that may be well founded can appear to be suspicious because accurate records and receipts of the amounts and purposes for the transactions are not available. Continue reading →