Most people are familiar with the concept of a Power of Attorney. It is a legal document that allows you to appoint an agent (often a spouse, child or other family member) to make decisions or take actions on your behalf. In the case of a Power of Attorney for Property, it allows your agent to access your accounts, pay your bills, sell your home, or take a whole host of other actions with your finances. This instrument can be tremendously useful. An estimated 5.1 million Americans aged 65 years or older may currently have Alzheimer's disease, the most well-known form of cognitive impairment; this number may rise to 13.2 million by 2050. As an attorney who focuses on elder law, it is a very common to see Guardianships for impaired older adults become necessary because there is no power of attorney for property. A properly executed Power of Attorney for Property can avoid Guardianship, assist families in planning for long term care, and generally avoid much stress and expense on the legal side of the situation.
On the other hand, Powers of Attorney for Property are not without risk or problems. Dealing with banks and financial institutions using a Power of Attorney is not always simple. Some financial institutions try to require their own form, request a “certified” copy or an original, none of which should be necessary and can cause unnecessary burdens for the agent. Most of the time an attorney well versed in Power of Attorney law can convince the financial institution to cooperate, but once in a while court intervention is necessary.
Finally, there is no question that Powers of Attorney are sometimes abused. Whether it is a child or a caregiver stealing money via the Power of Attorney, or an agent who is simply unable to properly manage the finances of the impaired person, there is inherit risk when you give control of your finances to another person. I usually recommend to clients who do not have a family member whom they trust to consider appointing a bank or financial institution as agent.
In summary, the Power of Attorney for Property is a tremendously useful tool. It can avoid expensive and intrusive Guardianship proceedings and allow for more sophisticated long term care planning. But at times banks and financial institutions make using it burdensome. And you must be extremely careful and thoughtful in who you appoint as agent and successor agent. If you do not have complete trust in the family member you are considering as agent, you should not appoint that person.
 Herbert LE, Scherr PA, Bienias JL, Bennett DA, Evans DA. Alzheimer's disease in the U.S. population: Prevalence estimates using the 2000 census. Archives of Neurology 2003;60:1119–1122; CDC: Cognitive Impairment: A Call to Action Now! http://www.cdc.gov/aging/pdf/cognitive_impairment/cogimp_poilicy_final.pdf