Financial Cons and Power of Attorney

The recent FDIC Consumer News report from the summer of 2013 goes over a number of financial fraud issues, including the misuse of powers of attorney, that seniors should be aware of. Elder abuse is a growing problem in this country as millions of Americans join the ranks of senior citizens every year. In some situations, financial fraud can result from seniors who grant power of attorney when they should not have.

Identifying Potential Problems

According to the FDIC, there are several classic warning signs associated with financial fraud, con artists, and scammers looking to take advantage of senior citizens.

Many of these scams begin with an unsolicited phone call or e-mail that asks you to pay money upfront. Some of these requests can be hidden behind claims that you’ve won a prize, are entitled to receive some sort of government compensation, or other smokescreen designed to get you to more easily hand over your money.

In other situations con artists will attempt to get you to sign documents. These documents are often presented as “only a formality,” or under the guise of signing so you can receive some sort of reward or compensation.

Carefully Reviewing Documentation

Needless to say, you should never sign any kind of legal document until you have both thoroughly reviewed it and given it to your lawyer for inspection. This is especially important when you are asked to sign any powers of attorney. Powers of attorney are very powerful legal documents that delegate the legal authority you have to make your own choices. Through your power of attorney you appoint an agent, also called an attorney-in-fact, who is legally allowed to make certain decisions for you.

If you are ever presented with a power of attorney document, always read it carefully. In almost every situation you need to be the one creating the power of attorney. If you’re asked to sign a power of attorney document presented to you by someone else, talk to your estate planning lawyer first and allow him or her to review it for you.

Power of Attorney and Oversight

Powers of attorney are excellent tools you can use to help you manage your own affairs when you experience a decline in ability. If you, for example, should become incapacitated one day, a financial power of attorney will allow someone else to make financial decisions for you.

But this power is something you should only grant with care. In many situations, creating powers of attorney that adds an oversight requirement can be a good idea. These requirements can, for example, require a third-party to review any transactions or agent takes on your behalf before the agent can make them.