Most people turn to family, friends or even neighbors when they feel a need to grant powers of attorney to someone to act on their behalf.
That can, sadly, be a serious mistake, accord to a report on the website marketwatch.com.
“Statistics on power of attorney abuse are hard to come by, but experts recognize it as a prevalent problem,” according to the article
“Some kinds of power of attorney grant their holders far-reaching authority over the affairs of people who are physically or mentally unable to conduct their own business.”
The article cites a November 2013 report on elder financial exploitation from the Government Accountability Office that “listed power of attorney agents as one category of potential abuser whose actions can be particularly challenging to prevent.”
“Indeed, family members, friends and neighbors are the culprits in 34 percent of elder financial abuse cases, according to a study by MetLife,” the report continues. “Yet much of the education on senior financial exploitation centers on scams perpetrated by strangers.”
“We’ve got them so scared of answering the phone or going online, when the majority of the assets are going out the back door by a trusted niece,” the report quotes Randy Thomas, a former police officer in Columbia, S.C.
The vehicle that often enables this, the retired cop told marketwatch.com, is power of attorney.
“Here’s what that can look like: A friendly neighbor offers to go pick up an elderly couple’s license plates. He has them sign a specific power of attorney for that sole purpose, printed from an automobile-club website. He takes that to the bank and uses it to withdraw money from the couple’s account. That’s an actual scenario that came before Thomas A. Swift, probate judge in Trumbull County, Ohio; the bank returned the money, because the teller should have but failed to notice the limited nature of the power of attorney.)
“Pamela Glasner, a filmmaker who lives in central Connecticut, experienced a more devastating scenario when a man from her parents’ Florida synagogue gained the couple’s confidence a few years ago. Glasner’s father, who had Alzheimer’s disease, had moved into a nursing home, and her mother lived alone and visited him daily. The man, who represented himself to nursing-home staff as the couple’s son, had Glasner’s father sign a power of attorney form that he then used to access their money and transfer their house into his name. The fraudster also had Glasner’s mother rewrite her will, naming him a beneficiary.”
“By the time we found out about it,” Glasner was quoted as saying, “all of our accounts were zeroed out.”
“When used properly, the power of attorney can assure that a trusted person is handling your financial affairs, or making health-care decisions for you, when you’re not mentally or physically capable of doing this yourself. Many lawyers include powers of attorney as part of a standard estate plan. Some recommend separate documents for financial affairs and health-care, while others create one document to address both.”