Understanding Powers of Attorney To Protect Seniors


Understanding Powers of Attorney to Protect Seniors

If you’re approaching or in retirement, you may be reevaluating your finances. Or perhaps you’re an adult child helping a parent through the same process. One important topic to discuss is Power of Attorney. TFB’s own Debra L. Purrington J.D. SVP, Director of Trust Services, offers advice throughout this article to help you understand POA options, why you or your loved one needs a POA, and how to protect against fraud and abuse.

“You can make a power of attorney that takes effect the day you sign it, or you can stipulate that your power of attorney will only come into effect upon your disability.  Always seek legal advice when deciding which type of power of attorney is right for you,” says Purrington, who is an attorney and wealth management professional with decades of experience in private practice law and administration of trusts and estates.

Keep reading to learn more about choosing the right type of POA for you or your loved one!

What is a Power of Attorney (POA)?

The POA is a legal document giving one person the power to act on another person’s behalf and make important financial and/or medical decisions if that person becomes incapacitated. As Debra L. Purrington J.D. SVP, Director of Trust Services at TFB, explains, “Powers of attorney are powerful planning tools that require careful planning and proper legal advice.”

While people of all ages can benefit from naming a POA, they are especially common among older adults. When you decide on your POA before you need one, you can take control of the situation and choose a trusted family member, friend, or professional. If you do become unable to make decisions for yourself and don’t already have a POA, your loved ones may have to endure a stressful and expensive court process to have a guardian appointed.

“Powers of attorney are powerful planning tools that require careful planning and proper legal advice.”  – Debra L. Purrington J.D. SVP, Directory of Trust Services at TFB Wealth Management

Here are some other POA basics to be aware of:

  • Principal: The person who signs the POA or executes it. The Principal is the person whose welfare the POA looks out for.
  • Agent: The person designated to make decisions on the principal’s behalf if/when they become incapacitated.
  • “A durable POA is one that stays in effect if they become unable to handle matters or make decisions on their own. As your senior’s chosen representative, you could pay their bills, manage their investments, or direct their medical care.” – com
  • Ending a POA: POAs can be ended for a variety of reasons including the death of the principal and if the principal revokes it, a court invalidates it, the principal and agent get a divorce, or the agent can no longer carry out the duties listed in the POA.

What Types of Power of Attorneys Are There?

When it comes to choosing the right type of POA for yourself or a senior in your life, Purrington advises: “Always read each power of attorney carefully before deciding how to use it, as they aren’t all alike.”

  • General POA: The most comprehensive type of POA, a General POA gives the agent the power to act on a senior’s behalf financially and legally. For example, an adult child could be the agent in a General POA to help healthy parents manage their finances and/or personal matters.
  • Financial POA: This type of POA can also fall within a General POA. A Financial POA gives the agent authorization to sign financial documents on the senior’s behalf, open or close bank accounts, write checks and access funds, buy and sell property and assets, trade and sell stock, pay bills, cash checks on the senior’s behalf, sign utility contracts, and manage services like housekeeping or in-home assistance.
  • Medical POA: Also known as a healthcare proxy or healthcare agent, a medical POA makes health care decisions for the senior if they’re incapacitated. Medical decisions must uphold the senior’s wishes as stated in their advanced directive or living will. For example, have they requested a DNR (Do Not Resuscitate), or do they want every possible measure taken to prolong life? The agent also has authority over medical treatment, surgical procedures, feeding tubes, organ donation, selection of healthcare or living facilities, and medical records.

There are several common types of POA’s, each with various limitations and restrictions.  The most commonly used are General POA, Financial POA, and Medical POA.

  • Durable POA: This allows the agent to make financial and medical decisions through all mental and physical circumstances unless the principal chooses to revoke it. For example, a durable POA can make decisions on behalf of the senior if they are in a coma or experience cognitive decline from dementia.
  • Limited POA: Also known as a special POA, this type of POA is only for a limited amount of time or for specific situations/transactions such as a real estate sale.
  • Springing POA: This type of POA is executed in advance, but doesn’t go into effect until a senior is deemed incapacitated. A Springing POA is a good option for seniors who want to maintain autonomy for as long as possible. The downside of a Springing POA is that it can lead to complications; for example, a medical evaluation to determine incompetence can be costly and time-consuming, as well as subject to legal conflicts.

Duties of Power of Attorneys in Virginia

“If you serve as attorney-in-fact for someone else, remember that your role is to serve the needs of the person who gave you the power, not to serve your own objectives,” says Purrington. To understand the duties of a POA under Virginia law, here are some highlights from the Uniform Power of Attorney Act in Virginia:

  • “Agent” means a person granted authority to act for a principal under a power of attorney, whether denominated an agent, attorney-in-fact or otherwise. The term includes an original agent, coagent, successor agent, and a person to which an agent’s authority is delegated.
  • “Good faith” means honesty in fact.
  • “Incapacity” means the inability of an individual to manage property or business affairs because the individual:
    • Has an impairment in the ability to receive and evaluate information or make or communicate decisions even with the use of technological assistance; or
    • Is missing or outside the United States and unable to return.
  • In a power of attorney, a principal may nominate a conservator or guardian of the principal’s estate or guardian of the principal’s person for consideration by the court if protective proceedings for the principal’s estate or person are begun after the principal executes the power of attorney.
  • Unless the power of attorney otherwise provides, an agent is entitled to reimbursement of expenses reasonably incurred on behalf of the principal and to compensation that is reasonable under the circumstances.

Agent’s Duties

Notwithstanding provisions in the power of attorney, an agent that has accepted appointment shall:

  • Act in accordance with the principal’s reasonable expectations to the extent actually known by the agent and, otherwise, in the principal’s best interest;
  • Act in good faith; and
  • Act only within the scope of authority granted in the power of attorney.

Except as otherwise provided in the power of attorney, an agent that has accepted appointment shall:

  • Act loyally for the principal’s benefit;
  • Act so as not to create a conflict of interest that impairs the agent’s ability to act impartially in the principal’s best interest;
  • Act with the care, competence, and diligence ordinarily exercised by agents in similar circumstances;
  • Keep a record of all receipts, disbursements, and transactions made on behalf of the principal;
  • Cooperate with a person that has authority to make health care decisions for the principal to carry out the principal’s reasonable expectations to the extent actually known by the agent and otherwise act in the principal’s best interest; and
  • Attempt to preserve the principal’s estate plan, to the extent actually known by the agent, if preserving the plan is consistent with the principal’s best interest based on all relevant factors, including:
    • The value and nature of the principal’s property;
    • The principal’s foreseeable obligations and need for maintenance;
    • Minimization of taxes, including income, estate, inheritance, generation-skipping transfer, and gift taxes; and
    • Eligibility for a benefit, a program, or assistance under a statute or regulation.

It is of the upmost duty of an Agent to act in good faith and accordance with the principal’s expectations and best interest in mind at all times.

Agent’s Liability

  • An agent that acts in good faith is not liable to any beneficiary of the principal’s estate plan for failure to preserve the plan.
  • An agent that acts with care, competence, and diligence for the best interest of the principal is not liable solely because the agent also benefits from the act or has an individual or conflicting interest in relation to the property or affairs of the principal.
  • If an agent is selected by the principal because of special skills or expertise possessed by the agent or in reliance on the agent’s representation that the agent has special skills or expertise, the special skills or expertise shall be considered in determining whether the agent has acted with care, competence, and diligence under the circumstances.
  • Absent a breach of duty to the principal, an agent is not liable if the value of the principal’s property declines.
  • An agent that exercises authority to delegate to another person the authority granted by the principal or that engages another person on behalf of the principal is not liable for an act, error of judgment, or default of that person if the agent exercises care, competence, and diligence in selecting and monitoring the person; however, nothing herein is intended to abrogate any duty of the agent under the Uniform Prudent Investor Act.


Except as otherwise provided in the power of attorney, an agent shall disclose receipts, disbursements, or transactions conducted on behalf of the principal if requested by the principal, a guardian, a conservator, another fiduciary acting for the principal, or, upon the death of the principal, by the personal representative or successor in interest of the principal’s estate. If so requested, within 30 days the agent shall comply with the request or provide a writing or other record substantiating why additional time is needed and shall comply with the request within an additional 30 days.

What is POA Abuse? Look For These Signs

Suspicious bank account activity or questionable changes to wills or financial documents can be red flags for possible Durable Power of Attorney abuse.

As Purrington notes, “Some powers of attorney allow the attorney-in-fact to make gifts to himself or herself. Consider carefully before giving anyone such power over your belongings.” While this is perfectly legal, unfortunately, POA abuse can and does happen. Also known as Durable Power of Attorney (DPA) abuse, here’s how to spot the signs in your loved one.

  • Suspicious activity on bank accounts
  • The agent or attorney-in-fact prevents the principal and/or other family members from reviewing financial statements.
  • The principal seems socially isolated and cut off from seeing or talking to friends and family members.
  • The principal’s mental health seems to be declining with symptoms of anxiety and/or depression.
  • The principal tells you they’ve been forced to sign checks or approve changes to their will.

It’s important to note that DPA abuse isn’t just a civil problem; it’s also a crime that can be reported, investigated, and prosecuted.

Tips for Managing POA & Protecting Seniors

Now that you understand the different types of Power of Attorney and all the ramifications, learn how to proactively protect the senior(s) in your life from abuse and fraud.

  • Choose a trustworthy agent and regularly reevaluate. As painful as it may be to consider, even an adult child may become untrustworthy if they find themselves in financial duress. That’s why it’s important to reevaluate your choice of agent once a year or so.
  • Limit the agent’s power to the financial transactions you need help with. This often changes over time, which is another reason to reevaluate your POA.
  • Similarly, you may want to restrict financial powers to when you become incapacitated as determined by two doctors testifying under oath.
  • Talk to bank tellers. Find out how they handle suspicious transactions and ask them to alert the principal if anything seems wrong.
  • Talk to your seniors. Regular check-ins and conversations with the senior(s) in your life will help you learn of any red flags or sudden decisions that seem out of character and/or not to their benefit.

Navigate Trust Services and Estate Planning in Northern Virginia with the help of TFB’s Wealth Management professionals.

Contact TFB’s Wealth Management team to speak with a Trust Services professional!

When it comes to Financial Planning, Investment Management, Trust Administration, Wealth Custom Lending, Estate Settlement,  Brokerage and Insurance Services (through LPL), clients choose The Fauquier Bank Wealth Management professionals to manage their financial needs. Do you have questions about Power of Attorney or need help managing a loved one’s finances? Learn more about our Wealth Management and Trust & Estate Management services and contact us today!