Estate Planning Attorney
A power of attorney is a powerful document. It is used to appoint someone else to make financial decisions for us. That person is called your agent or attorney-in-fact. With a general financial power of attorney, your agent can pretty much do anything with your finances that you could do. For example, if you are stuck in the hospital and you cannot pay your bills, your agent can. Unfortunately, they can also sell your car without you knowing about it or empty your bank account. So be very careful who you name as your agent. As emphasized in the story below from a qualified estate planning attorney from Two Spruce Law, it is important to have your affairs in place before something happens and you are not able to communicate your wishes about how to address your own medical and/or financial affairs.
This war story about the misuse of a power of attorney started when an attorney received a phone call from the Oregon Department of Human Services (ODHS). They reported that they had been contacted by an elder woman’s memory care facility because she had stopped making payments for her care. ODHS did some preliminary investigation and were calling the attorney to see if they would be willing to recruit a professional fiduciary to research and document what had happened with this lady’s money.
The professional fiduciary and the attorney’s office documented that the lady’s adult son had transferred over $680,000 of her funds to his account. He used the funds to purchase real properties in his own name with very low down payments. He was caught up in the real property bubble mania in 2006 and 2007. As many of us know all to well, the values of real properties plummeted. The lady’s down payments were all gone. The properties were in foreclosure. Her wealth evaporated for the most part.
Fortunately for her, the son purchased an airplane and hangar with his mother’s money. The attorney was able to place a lien on the hanger and recoup some of the mother’s money in that way. But it was just a small fraction of what was lost. Again, be very careful of whom you appoint as your attorney-in-fact.