Durable Power of Attorney Provides Security for Elderly.

IF your aging parent isn't firing on all cylinders, find out - fast - who is managing the money. It becomes all too easy for crooks to pick the pockets of people who aren't thinking clearly any more.

Often these crooks are right in the family, said attorney John Lamp of Spokane, Wash., who studies financial fraud for the Spokane County prosecutor's office. An adult child who's "helping" mom may help himself to most of her assets.

A study by Albany Law School in New York concluded that family members and relatives commit 83 percent of the fraud against the vulnerable elderly.

Sara Aravanis of the National Center on Elder Abuse in Washington said fraud runs the gamut - everything from failure to pay nursing home bills, draining bank accounts and stealing valuables to taking a senior's Social Security check.

Other suspects could be an attorney, a "good friend," a live-in aide or a super-attentive, self-appointed minister of God.

None of us think that we, personally, might ever become victims. But this very confidence trips us up. We need to plan for our own protection while we're still healthy, whether the plan is ever used.

This brings me to the durable power of attorney. It's a legal document that puts your financial affairs into someone else's hands.

The power is easy to use, which means it's also easy to abuse. Lamp calls it the "favorite vehicle" for financial exploitation of the elderly.

A simple power of attorney gives someone else the right to act for you as long as you're sound of mind. You might give your attorney the power to close on a real-estate transaction if you can't be there.

But simple powers expire if you become mentally incapable. To get control of your affairs, someone would have to be named your guardian in court.

To avoid that step, you can give someone a "durable" power of attorney. This power stays in force. If you become confused, the agent can simply pick up where you left off.

Choosing who holds power

When lawyers prepare wills, they usually prepare durable powers, too.

I have my husband's durable power and he has mine.

But you don't need a lawyer to prepare a durable power. Blank forms are available on the Web or at stationery stores, which makes durable-power fraud especially easy.

A few states require that you sign before a notary. But two witnesses aren't required as they are with wills.

For thieves, whether in the family or not, a durable power is "the weapon of choice," Lamp said. "It gives another person complete control of your life."

How can you protect yourself or protect a parent who may be at risk?

Safeguarding parents' money is hard, especially if they're being cared for by another family member. The caregiver may not want to be watched.

Still, the rule for incapable parents should be full disclosure. Those managing the money - including a family member - should tell the entire family where the assets are and how they're invested. The family should have access to copies of bank accounts and investment accounts.

This doesn't imply that you mistrust the manager. But oversight helps reduce temptation. As Ronald Reagan used to say, "trust, but verify."

When creating a durable power for yourself, consider varying the provisions, depending on who your agent is. You might want to give your spouse carte blanche, but limit the powers you give to a sibling or adult child.

Safeguards

Among the limitations you might consider, according to attorney Charles Sabatino of the American Bar Association's Commission on Legal Problems of the Elderly:

* Require the signature of a second person on checks or money transfers higher than a certain amount.

* Require an annual accounting of money invested and spent.

* Limit the size of the gifts your agent can give in your name.

* Give someone else the right to "fire" the agent (the durable-power form itself has to spell out any revocation rights).

You generally can't do all this with standard durable-power forms. You need a power prepared by an attorney who can discuss the provisions with you.

Lamp said states badly need to institute reform. He'd like all powers of attorney to be notarized, signed in the presence of two witnesses and publicly recorded.

He also thinks notaries should be protected from lawsuits if they report suspicious durable power signings to law-enforcement bodies.

Syndicated columnist Jane Bryant Quinn can be reached in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071 -9200.

Long-Distance Rates To Go Direct to Users

Starting next month, you're going to have a new relationship with your long-distance telephone company.

Until now, the companies have filed their rates, fees and terms with the Federal Communications Commission.

Rate filings come to an end on Aug. 1. In a change called "detariffing," the government has stepped out of the picture. You're not losing any federal consumer protection because you never had any. The FCC didn't review the rates and terms - it simply filed whatever the phone companies sent in.

Now, the phone companies will be disclosing rates and terms to their customers directly on state-to-state and international calls. It's going to be like a credit card relationship.

You'll get a written statement of the agreement governing your long-distance service. Millions of consumers have received one already. The agreements I've seen are clear in some places but also contain paragraphs of legalese.

Don't throw this disclosure Statement out. Read it, as best you can, then file it. That's your only record in case of a dispute. If you can't find the disclosure, print one from the company's. Web site after Aug. 1, when it will be available there. Or call your long-distance company for a duplicate.

Needless to say, the contract wasn't written in your favor. The phone companies can still change rates and terms at will, just as they do today. The contracts also require you to take disputes to arbitration.

- Jane Bryant Quinn