Tips to Protect Yourself When Granting Power of Attorney
To be valid, a Power of Attorney must (1) be in writing, (2) name a specific person as attorney-in-fact, (3) give the attorney-in-fact the power to act on behalf of the principal, and (4) be signed by the principal in the presence of a notary public. If you are considering signing a Power of Attorney, here are some tips to protect yourself from financial exploitation by your attorney-in-fact:
- Never appoint someone to be your attorney-in-fact unless you trust that person completely. Your attorney-in-fact should be someone you know very well. Avoid appointing someone who has been in trouble with the law or has financial problems.
- There is no government agency that oversees the actions of your attorney-in-fact. The only “overseer” to protect your interests is you. Some people appoint two people to act as their attorneys-in-fact with the idea that two attorneys-in-fact can watch over each other’s actions.
- Your income and assets still belong to you even though you have appointed an attorney-in-fact to handle them. Your attorney-in-fact must protect your interests and use your income for your benefit, not their benefit.
- You can terminate the power of attorney at any time and for any reason. You must notify the attorney-in-fact in writing signed by you that you are revoking the power of attorney.
- The attorney-in-fact must keep a record of all transactions performed for you six years after the transaction.
- You have a right to the accounting of all transactions performed by your attorney-in-fact. The attorney-in-fact has sixty (60) days to provide you with a written accounting after you make your request. Make your request in writing and keep a copy for yourself.
- An attorney-in-fact has a great deal of power that can be abused. Appointing an attorney-in-fact does not mean that you should stop paying attention to your finances. You can protect yourself by:
- Reviewing your bank statements and credit card billing statements every month;
- Checking your credit report;
- Investigating signs that your attorney-in-fact may be using your money for purposes that do not benefit you;
- Asking questions;
- Contacting a lawyer or the police if you think you have been exploited.