A neighbor friend has short term memory issues, but no long term memory problems.

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She is otherwise healthy and lives alone. Her sister lives in Arizona. She came here last year, with store bought fill in the blanks POA forms, had notary come to the house and sister was appointed POA. Friend thought that was the right thing to do as that was her only family. Friend wanted to have me help her daily as she knows she does need some help. Sister hired someone else who was $5 an hour cheaper even though neighbor doesn't want other girl. In October, sister came back here and tried to forceably move her to Arizona even though she clearly wants to stay here in her own home. Cops came and told sister if she takes her that it's kidnapping. Neighbor gets none of her bank statements and sister took all the other important papers with her. The other caregiver got hit by a car and can't come back. Neighbor has asked me to help her remove the sister as POA and she wants to appoint me. In the meantime I have been helping her out again daily. The sisters daughter called me threatening me with legal action if neighbor writes any checks to pay me.
My main question is, does my neighbor have any right to choose who cares for her or are all her rights taken away and sister who is POA has the only rights to make decisions even though neighbor has clearly stated many times her wishes to remain here until she dies. Does the sister have the right to freely spend my friends money on whatever she wants, even if it has nothing to do with taking care of my neighbor? Doesn't the POA go into effect only after friend is incompetent or incapacitated? If I do go ahead and have her appoint me as POA through a lawyer, can it be done so that the sister cannot just come here again and draw up another one like she did before to reappoint herself? The sisters have never been close. Sister is only interested in her money now instead of waiting for her to pass and her family inherits everything. Of course, if I am appointed POA, I will insist on it being done to protect her from even me so I can't frivolously spend her money. And when she does pass, I would make sure the family gets what's left.
Neighbor is afraid sister will spend everything now (there's not really a lot of money at stake) and sell her condo to force her to move to Arizona.
I almost feel like turning my back on my friend because I don't need the aggravation but I cant

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Thank you both. What I would really like to see happen is for a lawyer appoint someone else, not me, to have POA, especially over her finances to make sure her wishes for her living arrangements, whether being cared for at home as she wishes as long as she is medically able since she is healthy or if she needs to go in assisted living. I suggested to her that if I do take her to do this, all these wishes need to be voiced now so there is no doubt later. I will be more than happy to oversee her direct care but I really don't want the financial responsibility. And at this point, I also don't think I want to be her caregiver, but I will be happy to oversee what happens daily with her
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Unless your friend has been declared by a court to be incompetent in the legal sense she can easily draw up a new DPOA, revoking all previous ones. She can name whomever she chooses to be in that role.

And the police are right. Forcing this woman out of her home would be kidnapping.

The sister has let the POA go to her head. It doesn't really give her the authority she thinks she has.

Now whether your friend SHOULD revoke the current POA or not is a different question. But she certainly can.
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I'm assuming that the "neighbor" and "friend" are the same person?

Assuming that, and assuming that the neighbor isn't suffering from dementia or other mental incapacitation, it is in fact her choice who to select to act under her DPOA, as well as to make other decisions concerning her finances and her life.

She did, after all, execute the DPOA naming her sister to act on her behalf.

How do you know that the sister is "freely spend(ing)" your neighbor's money, and/or that the sister is only interested in the neighbor's money? It may be true, but I think you're getting your information second hand, from your neighbor, and it sounds as if there are conflicts between her and her sister.

Even if your intentions are to help your neighbor, I think you're caught between two people, one of whom doesn't want you involved.

If by some chance you were designated to act under a revised or new DPOA, I suspect the sister would be taking some action against you for possible undue influence.

It's sad that there's apparently friction between the mother and sister, but sometimes a third unrelated party can just exacerbate that friction. And it seems as though the sister and her daughter both don't want you involved.

I'd stay out of this unless the neighbor is being neglected, physically or financially abused (and you have reliable proof of it).
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