THE LAW OFFICE OF
PAUL MITCHELL
A Limited Liability Company
| Paul Mitchell |
| 3300 South Parker Road, Suite 215 |
NEW TOOLS AGAINST FINANCIAL EXPLOITATION
Before January 1, 2010, Colorado law was unclear about accountings for the activities of the agent acting according to a power of attorney. While an agent must always account to the principal who created the power of attorney, the problems occurred when the principal became unable to control the agent or his or her financial affairs because of later disability. This was, most frequently, the onset of confusion, forgetfulness or, most importantly, the inability to reason that accompanies dementia. The agent would continue to have full control of the principal’s funds because the power of attorney could be used during the disability of the principal: a “durable” power of attorney.
Consider a sister who suspects that her brother may be using mom’s money for his benefit. Since he has a duty as agent not to use mom’s money for his benefit without express authorization, taking mom’s money would be theft. The sister asks him to “show her the books”, that is, give an accounting.
He refuses. The sister would ask the Court for an accounting and the brother would say that mom did not want the sister to know about her financial affairs. How can the sister show that she has the right to an accounting?
Under the new law, the sister has the right to request the accounting. Also the government, usually through Adult Protective Services, a guardian, conservator, trustee of a living trust for the benefit of the principal, and even a caregiver may request an accounting.
Thanks to another law passed in 2008, the Court can order an accounting, even for an agent, without cause. Issuing the order is not a finding of fault. However, the Court may issue an emergency order restraining or suspending the agent’s powers if it finds that an imminent risk of harm exists to the principal’s welfare or estate.
In combination, these new laws are a significant step forward in the fight against financial exploitation of the elderly. With these new tools, the attorney can be immediately effective for a client who suspects the misuse of the disabled elder’s finances.
