Power Of Attorney: Choose Someone Who Loves You More Then Your Money
There was a really interesting article published in Barron's on how Power of Attorney abuse can drain someone's retirement savings if they were not careful. The post shared a number of different situations where an individual experienced financial abuse by someone that they thought they could trust. There was one quote in particular that really stood out for me;
"When you pick your agent under power of attorney, you need to pick someone who loves you more than they love your money." - Chicago Estate and Trust Lawyer, Kerry Peck
Elder financial abuse is a significant issue. In a report from the National Center of Elder Abuse, they shared that in a national study conducted by Acierno and colleagues that they discovered financial mistreatment to be the most commonly reported form of abuse, followed by potential neglect, emotional mistreatment, physical mistreatment, and last sexual mistreatment. They further shared that 60% of elder abuse is perpetrated by a family member. With two thirds being adult children or spouses. What is even more concerning is that when an older person is isolated, this can become a hot bed for this type of activity as it often goes unchecked or reported.
So how do we protect ourselves from this happening?
Here are some things to consider;
Plan Early and Document
Write down your wishes for your financial management before someone needs to step in on your behalf. Also have this validated with a legal body (such as an attorney or paralegal depending on where you live). For example, if you have agreed to pay for your grandchildren's university fees, write it down.
Decide and document what type of care you would like and can afford before it's needed. By doing this it in advance, it has the added benefit of placing your designated needs and desires for care before someone's potential consideration of their own inheritance
Ensure you know what money is coming in and going out and that it's well managed and documented.
Choose Wisely Who You Trust
Unlike an executor of your will, you may be around to experience your choice of Power of Attorney so you need to be extremely selective in who you choose
First and foremost, you need to choose someone you trust explicitly as they will need to potentially act for you and your best interests when you may not be able to. For example, just because someone is your eldest child does not necessarily mean they are the best person to choose as your Power of Attorney. You need to select based on who will be most effective at management and protecting of your personal and financial interests
The Alzheimer's Society suggest some other characteristics you should consider are;
Live close by;
Possess good judgement;
Have the time and the inclination to act on your behalf;
Have financial acumen, as many important financial decisions may need to be made on your behalf; and
Have intimate knowledge of your personal situation so they can do what’s best for you.
Talk to the person. Just because you think they would make a good Power of Attorney, they may not want the responsibility.
Selecting a Power of Attorney is a serious choice and one not to be taken lightly. After all, your future life may depend on it.
