Power of attorney documents can extend critical protections to adults who wind up incapacitated because of an illness, injury or accident. One of the most common reasons people give for not including financial power of attorney documents in their estate plan is the concern that the person they named could abuse those documents and impact their financial solvency through mismanagement or theft.
While it is true that anyone with potential access to your financial assets could abuse that authority, power of attorney does not give someone unlimited access to your finances. Instead, it gives them limited access to perform specific actions under certain circumstances.
More importantly, if they abused that authority, other people who notice that abuse can challenge them for the violation of the fiduciary duty that they owed to you, the person on whose behalf they have assumed that role.
Fiduciary duty means putting your needs before their own
Choosing the right person in your financial power of attorney is of the utmost importance. Some people will let any small amount of power go to their heads and will use any opportunity they can to enrich themselves at another person's expense, even if it is a long-term friend or a family member.
When you name someone in a power of attorney document, you put them in a position of inherent trust, which means they have a legally binding fiduciary duty to only act in your best interest when using the authority they received from that document.
If someone abuses their power of attorney position to make financial transactions that benefit themselves or outright steal from the person who entrusted them with that power, it is possible for the courts to strip that person of their authority and even order them to repay what they inappropriately took.
You can take action on behalf of a loved one
If there is anything more frustrating than seeing someone try to take advantage of you, it's watching them do the same thing to someone you love who is incapacitated or unable to stand up for themselves. Thankfully, the law in Maryland allows people to challenge a breach of fiduciary duty on behalf of someone else if they observe questionable behavior from someone who has assumed legal financial authority thanks to power of attorney documents.
In many cases, approaching the individual about your concerns may be a good first step. Perhaps what you thought were frivolous withdrawals or expenditures are actually necessary for the well-being or care of your loved one. If there is no explanation forthcoming or if that explanation is dubious, you can ask for the courts to review the situation and potentially name someone else to assume the authority delegated in the power of attorney document.