The person with power of attorney may undertake financial decision making and does have almost boundless legal limits. A power of attorney could be authorized to pay bills, open, close and manage bank and stock accounts, buy and sell property including the elder's residence, invest money, or withdraw money from investments, pay for senior care or services, decide on which living situation is best for an elder, place the elder in a care facility or nursing home, and otherwise make all important decisions except health-related decisions.
The elder may no longer have any say in financial decision making, or money decisions, if he or she has reached the point when a power of attorney is necessary. The law builds in the basic protection of having a formal document in place and requiring a notary public to verify the signature to protect against someone using another's identity. Unfortunately, the Durable Power of Attorney document itself does not protect the elder against the wrong use of the document, nor does it have any connection to the courts. It allows virtually unlimited freedom to make money decisions.
Abusing Power of Attorney
There is no legal requirement that a power of attorney be related to the elder. It is certainly a problem for those who have no children or other relatives to choose someone trustworthy. Very sad cases of financial abuse have occurred when the former secretary, housekeeper, gardener, or other person close to the elder was given a Durable Power of Attorney. It is truly a "license to steal" in the hands of an unscrupulous person whose motive is to take the elder's money. Even those who have known the elder for many years are not necessarily trustworthy when it comes to money. A valuable house, jewelry, large bank account, or other assets can simply be too tempting for someone who puts self above the needs of a helpless and unknowing elder.