FINAL THOUGHTS ON POWERS OF ATTORNEY

When representing a principal, the main disadvantage of a Power of Attorney is that it is subject to abuse: although there are now new rules requiring accounting,the use of monitors, execution rules, etc., it still does not have the same ongoing court supervision of the attorney-in-fact as there is in a guardianship. If the attorney-in-fact abuses his or her authority and acts improperly, a court may step in and take action. However, in many cases, the damage is already done, and it is difficult to undo it. Of course, you should take great care in selecting your attorney-in-fact. But I also see the great divisions it creates in families wherein one member is being made attorney-in-fact unknown to other family members. My suggestion is the following: after meeting with the principal, ascertaining their wishes and before executing a Power of Attorney, counsel should notify all family members that would receive notice under the rules regarding the appointment of a guardian. A meeting should be scheduled with all in attendance wherein the principal expresses their wishes and explains why they are executing the Power of Attorney, why a particular person was selected as attorney-in-fact, why certain powers were granted, etc. Let all family members discuss it among themselves and with the principal. Afterwards, then let the principal make their decision. Does this make the process costly? Yes, but, in the long run, it is worth it. I view the Power of Attorney as I view a prospectus for securities under federal securities laws and rules: notice and disclosure is the key!