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My friend is happy in her AL apartment, but a recent UTI caused her to hallucinate and she was sent to a NH for a week. Her niece arived from AZ and is trying to force her to move to another state now. She has a POA -- is she able to force this issue?

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POA isn't a factor and gives the niece no control over where her aunt lives. Unless the aunt has been declared incompetent the niece can't force her to live anywhere.
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The POA only stays in place if your friend wants it to. She can revoke it, if she feels her niece is not acting on her behalf in the way she wants. Your friend might contact an Elder attorney for details on how to do that. As long as your friend is competent, her niece should not be able to make decisions on her behalf, like where she lives.
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Amott, does your friend have any other family members who live in the area? If not, could that be the reason the niece would like her aunt to move closer to her, to help with her care?

Since your friend lives in an Assisted Living building what are the medical issues with your friend that you know about, has she told you everything?
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The POA may or may not provide power to move her aunt. If it is a standing POA incapacity is not required provided the document states specifically that neice can choose where aunt shound live. On the other hand if it is springing, aunt must be determined to be incapacitated, unable to make her own decisions usually based on medical evaluations by two doctors, that will officially document aunt's conditions and that she requires assistance.
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Not unless she is the legal guardian.

But ... what would be the best for your friend?
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My friend is 88 years old and never had children. Her sister (age 78) and the niece are her only relatives. She has been sent to NH because of a UTI problem. She has lived here for 20 years and doesn't want to move. And she doesn't get along with the sister.
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I guess it doesn't matter any more. A transport van picked her up and took her away. She faces an eleven hour drive. I hope she is strong enough to make it.
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I'm sorry to hear that. Is it possible that her niece actually had guardianship over her? Otherwise, I don't think that she could have been forced. Did she say "no I don't want to go" when transport arrived?
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I often hear stories of people who's family "put the in a nursing home against their will". Of course no one can really do that to someone who chooses to fight it, but few have the strength to call in a lawyer and alienate themselves from their families, so they complain bitterly but resign themselves to it. From the facilities standpoint they are just having trouble settling in like so many others. Usually the family is not greedy or heartless but have had to carefully consider all the available options. Perhaps your friend's niece was just looking ahead at the difficulties of trying to care for her aunt long distance, perhaps your friend was slipping in other ways that were not apparent to you as a friend. Sometimes there just are no good solutions.
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