Powers of attorney (POA) are sometimes a necessary tool when estate planning. However, sometimes the elderly are exploited or defrauded because the principal trusted someone they shouldn’t or a POA was drafted and forged on their behalf without their knowledge.
One way to prevent powers of attorney exploitation is for a POA to be notarized. For example, a POA in Florida must be notarized in order to be valid.
Understanding Why a Power of Attorney Should be Notarized?
Powers of attorney are powerful tools for those who need someone to make decisions regarding financial and healthcare matters when they can no longer. Unfortunately, however, people have been known to draw up fake powers of attorney to defraud the elderly and infirm.
Protections have to be in place to prevent the production of fraudulent powers of attorney with forged signatures. That’s why Florida passed a law that makes it mandatory that a notary sign a power of attorney.
The process for signing a power of attorney is as follows:
- The principal signs the document in front of two witnesses
- The two witnesses then sign the document indicating that they witnessed the principal signing it
- Subsequently, the principal must declare that they willingly signed the document to a notary
- The notary will sign the document acknowledging the declaration
To illustrate how much power is granted to a person who may be designated the agent on a POA, let’s take a look at examples of the types of powers of attorney that, if exploited, could have appalling ramifications for the principal named on the POA.
Durable Powers of Attorney
There are usually two people that are listed on the POA. The principal is the person who needs an agent to represent them when they are not able. The agent is the person who will make decisions and transactions on behalf of the principal when the principal cannot.
A durable power of attorney permits control of the principal’s finances, healthcare decisions or both after the principal is incapacitated or disabled. Durable powers of attorney can be springing or non-springing. Springing means that a power of attorney doesn’t become effective until the principal becomes incapacitated or disabled. A non-springing durable power of attorney is effective immediately after the POA is signed.
Financial Powers of Attorney
Financial durable powers of attorney have tremendous potential for fraud. Once the agent’s duties become effective, there is no limit, if not stipulated, to the financial decisions or transactions made on behalf of the principal. The agent has access to these types of financial transactions and decisions, including:
- Real estate
- Retirement benefits
- Government benefits
- Healthcare billing and payment
- Bonds, shares, or commodities
So, it’s no wonder that people with fraudulent intentions would want to draft and forge a POA to access all of these assets.
Healthcare Powers of Attorney
This type of POA has the potential for elder abuse when the principal cannot give or withhold informed consent regarding medical treatment. The agent steps in to make those decisions, especially if the principal is physically disabled or needs long-term care.
The agent can give or withhold medical treatment consent on the principal’s behalf and make DNR decisions, such as artificial nutrition, hydration, or life support. An agent’s responsibility is to carry out any healthcare wishes that the principal specifies.
Consequences of a Fraudulent Power of Attorney
Anyone can file elder abuse charges under Florida’s Abuse, Neglect and Exploitation of Elderly Persons and Disabled Adults statute against someone who uses a fraudulent power of attorney. In addition, anyone can file a civil suit on behalf of the principal to collect damages on properties and assets that a perpetrator stole.
Fraud & Elder Abuse
Fraudulent powers of attorney used to waste, embezzle or intentionally mismanage the principal’s funds, assets, or properties are considered elder abuse in Florida. Elder abuse is a felonious crime, and sentences will be meted out depending on the degree of the felony:
- First-degree felony: $50,000 or more was exploited from an elderly person
- Second-degree felony: More than $10,000 but less than $50,000 was exploited
- Third-degree felony: Less than $10,000 was exploited
The punishments for each felony are as follows:
- First-degree felony: 30 years in prison with a fine of $10,000
- Second-degree felony: 15 years in jail with a fine of $10,000
- Third-degree felony: 5 years in prison with a fine of $5,000
Of course, these prison terms can double with extended eligible release times for the habitual offender.
Many states, including Florida, mandate that the principal’s signatures be notarized and other states also require the notarization of the witnesses’ signatures. Even if notarization was not a requirement, the principal should notarize a power of attorney to make it easier for the agent to conduct business on your behalf.