There is something very sad about reaching your golden years, thinking that you will enjoy golf, grandchildren and giving sage advice, but instead, you are faced with abuse by those you trusted the most. Financial abuse of seniors by family members is becoming common and creates great family discord. There are steps to take to prevent financial abuse by little Johnny.
Please do not make the mistake of thinking that one of your children would never abuse you. It is important to have an Enduring Power of Attorney in order to appoint a person to take care of your financial affairs if you become incapacitated. Without an enduring power of attorney you are vulnerable and there is no one to protect you when you are ill. Whether the incapacity results from a short term condition or is permanent, the enduring power of attorney provides a seamless transition to allow a trusted relative or friend to pay bills, file tax returns and generally make and carry out all financial matters. The enduring power of attorney also allows access to information. In our current system, privacy is protected. When your mom is ill and you want to make sure her utilities are paid, you will not be able to access even information about her utility payments if she has not done an enduring power of attorney.
While the enduring power of attorney is easy and so useful, it also is an easy tool for a rogue to financially abuse a senior. Unfortunately, the rogue may come in the form of sons and daughters and other relatives who were trusted and yet, when put in power, suddenly help themselves to the senior’s finances. It is an abuse of trust by that little Johnny.
When preparing an enduring power of attorney, the first and most important decision will be who to appoint as your “attorney.” Who is the person that you trust to manage all your financial affairs? If you are married or have an adult interdependent partner or common law spouse, you will likely appoint that person to be the primary attorney. But, even this decision requires consideration. If you are in a second marriage and do not share your finances, it might be useful and best to appoint another trusted advisor or person to manage finances either with your spouse or alone.
When preparing an enduring power of attorney, the first and most important decision will be who to appoint as your “attorney.” You must also consider who will be appointed if the first named person cannot act. A named alternate is very important. The first named attorney may be in the same accident that incapacitates you and also may be unable to act.
First, pick someone you trust to be an attorney to manage your finances if you become incapacitated. This may seem like a trite statement because you are unlikely to appoint someone you do not trust. But you really should consider prevention of abuse. So, the best choice is to have at least two people appointed. This way the two attorneys can oversee each other and make sure there is no financial abuse.
Please do not make the mistake of thinking that one of your children would never abuse you. Every senior who has been abused believed they could trust the person they appointed. If there is abuse, a court application must be made to remove the attorney and judgments must be obtained to collect the stolen money. Often, seniors do not want to report abuse because they do not want to report that their child abused them. Also, an incapacitated senior will not be able to take the actions themselves. Thus, the family is torn apart by some children bringing actions against other children. That is certainly the end of a joyous Christmas dinner!
A named alternate is very important. In addition, in a power of attorney you could say that your attorney could continue to make gifts to friends and family after you are incapacitated. This should also be avoided. There is no reason gifts should be made after you are incapacitated. If you allow gifts to be made, it is easier for abuse to occur.
We encourage planning and preparation of an enduring power of attorney but also wise choices on the appointment of more than one person to prevent abuse by little Johnny.