But I Thought I Could Trust You...

My Agent, my Son . . . you're a Thief! - Part 1

It happens!

With the rapid increase in the number of Americans aged 65 or older (46 million and growing each year), the incidence of financial exploitation has grown substantially. Whether a scam artist says he’s your nephew who is incarcerated in a foreign country or the IRS intends to arrest you for failure to pay federal income taxes, or, simply, identity theft, the object is to find a way to separate you from your money.

But it does not end with scam artists.

A trusted family member or a friend may also be a potential source of elder abuse. The signing of a financial power of attorney that names an agent may be a breeding ground for unscrupulous individuals who have their sights on redirecting your wealth.

Understanding the language within a durable financial power of attorney (the one that names your “agent”) is a daunting exercise that takes significant time and effort. Too many people merely sign the document, but do not understand completely what they are signing. In a sense, it’s a ticking time bomb – triggered at some point – if the wrong person is named as the agent.

In a nutshell, you are signing a “blank check.” Think about this…would you give this person free reign with your personal finances?

Here are a few recommendations, questions, and comments to consider when establishing a durable financial power of attorney:


· Review the document every year. Determine whether the laws have changed that apply to agents.

· Discuss the document with your attorney, if you are uncertain or need direction on an agent.


Think about these questions when you are considering your financial power of attorney.

· Is the person aware of the law that governs financial power of attorney? Make sure they are comfortable serving as your agent.

· Is the agent willing to accept the responsibility, and possible liability, for failure to act appropriately on your behalf?

· Who will oversee the agent? Family members?

· Should the agent account for financial matters on an annual basis to you and the beneficiaries of your estate?

· Is the agent permitted to change the beneficiaries of your retirement plan, insurance policy, or annuity?

· Is the person you appointed investment savvy? Are they responsible with their own money? Could this person be someone who would take advantage of their appointment?

· When should the person take charge of your financial matters? Now? When you are incapacitated?

· Did you name an alternate agent? Should you name a co-agent?


The key is to select the right person to act as your agent and decide on the powers the person should possess.

Lastly, make the decision to execute a financial power of attorney when you are fully aware of your financial matters. The failure to act requires court intervention through a guardianship. And a guardianship requires a court hearing at a substantial cost to you and your family – it is a last resort.

Make it a priority every January to review your documents – your will, trust, and health care and financial powers of attorney.