Power of Attorney Scams
A Power of Attorney is a legal document, which can be very dangerous in the wrong hands. When being used fraudulently, it is most often used to steal money and investments, from the victim.
An example of its abuse would be when an elder has to go to the hospital or has another crisis and a family member has them sign the POA in case “anything needs to be handled while they’re incapacitated.” Then, the family member uses the signed POA document to circumvent ordinary protections at financial institutions, stealing some or all of the money that belongs to the client. In some cases, they will tell the elder or disabled person that they moved the money so that they could keep it protected for them.
The signing of this document creates a fiduciary duty on the family member to act in the best interests of the elder or disabled person. They are supposed to report all activities to the signer, they are supposed to gain a profit, only if approved by the elder or disabled person, and they are not allowed to make a secret profit or transfer belongings to another person without explicit consent. This does not stop the criminal from defrauding their family member.
In the case where a POA has been used fraudulently, it is important to act quickly, even if a lawsuit against a family member is required.
To reduce the potential misuse of a POA, utilize the following methods:
- Consider having a joint POA, meaning that more than one person must agree to act on behalf of the elder or disabled person. This may result in disagreements but it also provides a checks and balances situation.
- If you need to sign a POA, in advance of medical care or other upcoming needs, leave the signed POA with your attorney. Have an attorney involved in the whole process to increase your protection.
- Do not grant POA to someone you do not know well or do not fully trust.
- If you need a POA for the short term, use it, but then revoke it as soon as you are able to do so.
- If a family member transferred property to themselves while serving as your POA, demand it be returned as soon as the POA is revoked. If they refuse, contact your attorney immediately.