Even people with good intentions can do harm
It is troubling how unfamiliar many people are with their responsibilities when acting under a Power of Attorney for Property. I came across this advice column recently, which discusses a situation that unfortunately happens too often. The facts of the story are a bit confusing, but to put it simply, a grandson did not realize that it was wrong for him to use a Power of Attorney to sell his grandmother’s house and then use the proceeds to pay down his own mortgage. His grandmother moved in with him and he cared for her for a few years…while also helping himself to funds from “their” joint chequing account. After four years, his mother discovered these financial arrangements and is now threatening to sue. The writer is the grandson’s wife who simply does not understand what her husband had done wrong.
Many people believe that seniors are only vulnerable to strangers with bad intentions, but much financial abuse occurs simply because attorneys for property do not understand the nature of their appointment. An attorney has a fiduciary responsibility to the grantor and is not allowed to use the grantor’s property for his own benefit. Yet many attorneys still do. And when the money is gone, it’s gone. It doesn’t matter whether it was taken because of bad intentions or ignorance, it’s gone. The good news in this story is that the grandson seems willing and able to repay the proceeds of the house sale, so his grandmother will have some financial security. Many others in similar situations do not.
So, what can be done to prevent something similar from happening to you? Attorney education and oversight are essential. Think carefully about who you appoint as your attorney and what conditions you place on the powers you grant him or her. Make sure he or she understands both the responsibilities of the role as well as your wishes. Your attorney must understand that he or she would be acting on your behalf and cannot use your property for his or her own benefit. He or she needs to keep an accounting of all actions taken with your property. You should also consider appointing joint attorneys. Of course, we also recommend using Estate Protect. In this case, the grandson’s misuse of his grandmother’s Power of Attorney could have come to light years earlier, which would have protected the grandmother’s finances and prevented the conflict this family is now experiencing. Early identification and intervention is especially effective in situations of Power of Attorney misuse.