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Checks and balances in power of attorney

When a person gives another a great deal of power in their lives, it is good to have checks and balances built in to protect the individual’s interests. This rule of thumb was dramatically illustrated in a recent case where a caregiver was accused of embezzling more than $150,000 from the patient she assisted. While the details of law from California to Maryland may vary, the priorities of relatives who want to protect their vulnerable family members are similar. Although the resulting crime was unfortunate, the family acted as a check and balance, protecting the patient from more losses due to the alleged abuse of a power of attorney.

In the instant case, a caregiver in Los Angeles was being paid to take care of an elderly person in an at-home care environment. Since many of the responsibilities of the caregiver included paying expenses, the caregiver was given power of attorney. This enabled her to pay for groceries and other bills that maintained the household. An unfortunate development, though, was that the caregiver appears to have embezzled more than $150,000 through personal withdrawals and charging excessive amounts for various services. It is alleged that at least one month the caregiver charged more than $4,000 to groceries alone.

In this case, the accountant had given the caregiver authority to pay expenses and the caregiver also possessed the power of attorney. It appears that once the family was put on notice of the problem, the alleged embezzlement was stopped. In situations where large sums of money are involved, or a caregiver may have the opportunity to take advantage of a patient, it is good to build additional checks and balances into the plan. This can help protect the patient and the family’s interests.

While there was apparently a significant amount of embezzlement in this case, the checks and balances of having the family accountant as part of the process and keeping the family in the loop likely prevented a much worse circumstance. Having a clear understanding of the power of attorney requirements in the state of Maryland can help as an individual or family has a power of attorney drafted. This can help protect the individual even when the family may not be available to be as actively involved as they might like.

Source: Los Angeles Times, “Caregiver accused of stealing more than $150,000 from elderly woman,” Dec. 20, 2012


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