New York Power of Attorney: Will Recent Amendments Reduce the Risks of Elder Abuse and Fraud?

Amanda Cluff, Senior Editor, Albany Government Law Review Member

I. Background

One of the most prevalent concerns in both elder and healthcare law is the abuse of rights bestowed upon a durable power of attorney.[1] Numerous stories circulate daily regarding elderly persons who have been financially manipulated by individuals designated to this important role.  A power of attorney is defined as “a legal document through which a principal authorizes an agent [also known as an attorney in fact] to act on the principal’s behalf.”[2] This power usually terminates once the principal—the person who authorizes the power to an agent—becomes mentally incapacitated, or otherwise unable to exert decision-making abilities.[3]

However, when a durable power of attorney is created, the power of attorney continues to remain effective, even after such incapacity occurs.[4] This sort of power can be beneficial in several respects.  First, the durable power of attorney can replace an unfamiliar court-appointed guardian or conservator.[5] In addition, those who are given a durable power of attorney are able to make both personal and property decisions in the best interests of the principal, who lacks capacity to do so.[6] However, the danger of a durable power of attorney is also what makes it beneficial—the durable power of attorney is given virtually unconstrained and very broad authority to handle the principal’s financial affairs.[7] Consequently, this is a power that is difficult to monitor and, therefore, may be subject to various forms of abusive or fraudulent behavior by the agent.

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