AARP Report Urges Adoption of Stronger State Laws to Prevent Power of Attorney Abuse
WASHINGTON, Dec 04, 2008 /PRNewswire-USNewswire via COMTEX/ — 12 states set to consider reforms in 2009
A large majority of state laws lack protections for individuals creating financial powers of attorney, according to a report released today by AARP’s Public Policy Institute. Presented at the 8th Annual National Aging and Law Conference, the report urges state legislatures to adopt the Uniform Power of Attorney Act (UPOAA), a model law that lays the groundwork for keeping seniors safe from abuse, while allowing them to plan for the future.
A power of attorney is a legal document used by an individual to empower someone else to act on their behalf, and often is aimed at allowing the appointed agent to act when an older person no longer can.
"As the population ages, the power of attorney will be used even more often to appoint trusted family members or others to handle financial decision-making – but it also can be a ‘license to steal’ because it grants broad powers with little oversight," said Naomi Karp, strategic policy advisor, AARP Public Policy Institute. "Already, we are seeing an explosion of cases in which seniors are losing their savings, their homes and, in some cases, everything they own. This report is a crucial first step to protect older Americans."
The report, "Power of Attorney Abuse: What States Can Do About It," compiled by the American Bar Association Commission on Law and Aging, under contract to AARP, comes as legislatures in 12 states consider adopting the law in 2009. It includes individual comparisons of current state laws with the UPOAA and advocacy tips to assist advocates and policymakers to adopt the UPOAA or similar law reform measures.
Following a 2002 national survey that found a need to improve state laws to better protect incapacitated individuals and improve acceptance of powers of attorney by third parties, the Uniform Law Commissioners drafted the UPOAA. The three-year effort included involvement of and input from bankers, the American Bar Association (ABA) and consumer groups such as AARP.
"Though in many cases, POAs enhance autonomy of seniors, they also give a great deal of authority to their agents – those trusted to execute the POA responsibly," said Joseph O’Connor, chair of the American Bar Association Commission on Law and Aging. "There is very little regular oversight and no clear standards for agents. The UPOAA sets a benchmark against which states can enact laws to protect the financial security of older Americans."
Though two states – New Mexico and Idaho – have adopted the full UPOAA, the report shows only a small number of states have provisions that are identical, equivalent or substantially similar to the UPOAA. For example:
— Only four states have adequate provisions regarding an agent’s
— Only eight states have adequate provisions requiring specific grant of
"hot powers" – those with high propensity for dissipating
property or altering estate plans
— Only four states have adequate provisions on agent liability
In 2009, legislatures in Colorado, Georgia, Indiana, Maine, Maryland, Michigan, Nevada, Ohio, Oregon, Pennsylvania, Virginia, and Wisconsin will consider adopting the law.