Two questions an elder law attorney frequently hears: (1) What is the most important legal step a senior should consider? (2) What is the most dangerous thing a senior can do in his or her lawyer’s office?

Arguably, both questions have the same answer. Every competent adult should seriously consider signing a durable power of attorney (and a durable power of attorney for health care purposes). At the same time, every person who signs a power of attorney gives his or her agent a license to steal.

Why is it so important to sign such a dangerous document? Once an individual becomes incapacitated, there is no simple legal mechanism to permit regular bills to be paid, accounts to be managed, or even the most straightforward financial decisions to be handled. Usually the only alternative is conservatorship over the now-incapacitated person’s estate (what is in some states called "guardianship of the estate"), and that process is almost inevitably expensive, time-consuming and invasive. Perhaps more importantly, the formality and adversarial approach of the legal system can be personally debilitating for the subject of the proceedings, no matter how well-intended the proceedings may be.

There are several options to provide efficient management of your finances after you lose the ability to make decisions for yourself. Living trusts, though often over-hyped as a method of avoiding the probate process after your death, can actually be very helpful to family members coping with your future disability. Many seniors take a more straightforward route by simply adding their children’s names to bank accounts, car titles and even deeds—though the dangers inherent in that approach should be obvious. But for most people the easiest and most effective way to address the concern will be to sign a durable power of attorney.

The primary benefit of the durable power of attorney—the ability of your agent to manage your property without oversight from any court or lawyers—is simultaneously the biggest risk. Precisely because no one else is routinely monitoring the behavior of agents, the incidence of theft, mistakes and misbehavior is shockingly high. Elder law attorneys routinely see financial abuse of the most vulnerable of seniors by trusted family members, and durable powers of attorney are almost always involved.

What can you do to protect yourself? Obviously, the selection of agent is the key concern. Regular review of powers of attorney is also important; as family dynamics shift and you learn new information about your children, you should periodically rethink your choices. You can also require your agent to account to someone else—perhaps another one of your children—so that at least someone is watching.

As is so often true in life, your decision about executing a durable power of attorney requires you to balance the competing considerations. On one hand, it is terribly important to provide a mechanism for someone to handle your personal affairs if you become unable to do so. It is also important that the person designated should be the one you choose and trust, and that you know who that person will be so that you can discuss your expectations and wishes in advance. On the other hand, the selection is fraught with danger. You should make it with your eye on the reality that you are giving tremendous power to another person, and the selection of your agent is therefore critical.

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