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AARP-Backed Power of Attorney Reform Passes Unanimously in Montana Legislature; Signed by Governor

Governor Brian Schweitzer has signed an AARP-backed measure aimed at protecting elderly and vulnerable Montanans from abuse, neglect and financial exploitation. The Uniform Power of Attorney Act authored by Rep. Chris Hansen (R-Havre), establishes legal reforms to curtail power of attorney abuses that have cheated the elderly, the disabled and their heirs. Current Montana law dealing with financial powers of attorney lacks adequate consumer protection provisions.

Governor Brian Schweitzer has signed an AARP-backed measure aimed at protecting elderly and vulnerable Montanans from abuse, neglect and financial exploitation. The Uniform Power of Attorney Act authored by Rep. Chris Hansen (R-Havre), establishes legal reforms to curtail power of attorney abuses that have cheated the elderly, the disabled and their heirs. Current Montana law dealing with financial powers of attorney lacks adequate consumer protection provisions.

Vulnerable older persons are increasingly losing their life savings to unscrupulous individuals who have been granted power of attorney over their finances. By giving a spouse, adult child or other individual power of attorney, seniors can ensure that someone will manage their affairs if they become incapacitated. The individual who has that power of attorney can do everything from writing checks to selling property.

Like most states in the U.S., Montana did not have adequate safeguards to protect against dishonest power of attorney holders -- thereby giving them a license to steal. While national data is not available, some adult protective services agencies are reporting a sharp rise in financial exploitation involving power of attorney abuse. The current economic downturn has given rise to more cases of abuse.

During legislative hearings, proponents of the bill included representatives of nursing facilities. They testified about seeing unscrupulous individuals misuse and entirely exhaust assets that had taken an entire lifetime to earn. Unfortunately, the fact that assets have been stolen is often only discovered when there is a failure to pay for health care costs. In these circumstances, nursing home administrators had no recourse against the agent, who has been given permission by the patient to make financial decisions. Their only option is to bring a collection action against their elderly patients. Although these victims could bring a legal action for the depletion of these funds, they often are reluctant to do so because the guilty party is a family member or close friend.

Powers of attorney are regulated by state law and those laws vary substantially. In 2006, the Uniform Law Commissioners (who draft and propose model state laws) approved the Uniform Power of Attorney Act. Among other goals, the Uniform Power of Attorney Act aims to prevent, detect and redress power of attorney abuse.

Although Montana currently provides statutory guidelines for financial powers of attorney, it does not contain a clear statement of the fiduciary duties of agents who are given this power, nor does it provide clear liability for the abuse of these powers. The Uniform Power of Attorney Act provides those protections as well as other helpful provisions for persons who want to use a power of attorney to give another person the ability to make financial decisions for them.

Specifically, the new law will:

  • Prohibit self-dealing and clearly state the fiduciary responsibilities of the agent, who must spend the principal’s money in their best interest.
    Preserve the principal’s estate plan.
  • Make abusive agents liable for restoring stolen property and assets.
  • Make clear that a power of attorney terminates upon death.
  • Improve detection of possible power of attorney abuse.
  • Set forth clear agent duties and prohibitions that make civil actions and criminal prosecutions possible.


“The power of attorney is a powerful tool for older Montanans and people with disabilities of all ages. It provides a way for people to get help with financial decisions, while helping them avoid complicated and costly conservatorships or guardianships,” said Joy Bruck, AARP Montana State President. "The majority of powers of attorney work very well, but when they don't work they cause tremendous hardship. This is why AARP Montana supported the uniform power of attorney legislation that protects vulnerable Montanans from fraud and financial abuse.”

The new law goes into effect on October 1, 2011.

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