Powers of Attorney are important documents that provide family members or others with the necessary legal ability to act as representative for individuals unable to do so for themselves. Unfortunately or fortunately depending on the case, a Power of Attorney is a pretty powerful tool. That power and the growing number of aging individuals in society mean that the legal world has seen an uptick in the number of litigation cases involving powers of attorney. The Powers of Attorney can be abused in at least two ways: the abuse of a valid Power of Attorney; and the fraudulent procurement of a Power of Attorney.
Here are a couple of recent cases:
- A probate court found that in Estate of Mary E. Hiller, that Mary E. Hiller was not of sound mind when she granted her son, Paul A. Ligor, a Power of Attorney. Ligor then used his mother’s Power of Attorney to systematically deplete her estate by:
- Adding his name as a joint owner to his mother’s financial accounts;
- Setting up a Scottrade account as a joint account that was fully funded by his mother and then used for his own benefit;
- Purchasing a car, groceries and other household items that didn’t benefit his mother who was mostly institutionalized during this time; and
- Paying himself and his wife for being caregivers during and after her death though she was mostly institutionalized at the time.
- A former bank vice president was indicted on 11 counts of bank fraud when he used a family member’s power of attorney to “borrow” nearly half a million dollars.
- A Wisconsin woman pleaded no contest to six counts of theft. Laurie Goetsch stole $200,000 from her adoptive mother’s financial investments while she had power of attorney. Her adoptive mother was a neighbor that adopted her sometime between 2008 and 2010.
Without a Power of Attorney or guardianship, a person cannot perform legal tasks for an incapacitated adult. For a Power of Attorney to be in effect, the document must be executed prior to incapacity. When a Power of Attorney is used correctly it may preclude the need for an expensive court action and invasion of privacy such as would be experienced with a guardianship. The individual(s) named in a Power of Attorney is accountable and may be called to fully account for his or her actions. By the time people begin to abuse a Power of Attorney; it becomes a matter for the courts.
That’s why Seattle-area Elder Law Attorney, Rajiv Nagaich recommends family meetings. The point of a family meeting is to get everyone on the same page. A recent email he received outlined exactly why a family meeting is so necessary. In it, one of the adult children of a woman in her 80s was concerned that her siblings were taking financial advantage of her mother. She worried that they were bleeding her dry when in the future she might need care she could no longer afford to pay for.
If we could re-write history, her mother could have held a family meeting and discussed her care as she aged. She might have been able to put her daughter’s mind at rest by letting her know that she wanted her adult children and their families to live with her in exchange for her own care. She might also have provided that they would be paid a certain fee in addition to the housing in compensation for that care. At any event, she could have made clear her expectations about how her future would be handled should she no longer be able to adequately voice those expectations so that family members wouldn’t be forced to hem and haw about whether they should step in to protect a loved one from other members of the family.
For more information on family meetings and why it’s important to have one as part of your planning, please see this article: Why a family meeting should be in your future
For an article by Rajiv Nagaich about what the concerns some people have about having a Power of Attorney, please see this article: Power of Attorney