“Today’s high-tech banking coupled with the decreasing cognitive capabilities that can plague seniors, makes them particularly vulnerable to financial abuse. Con artists often use power of attorney forms to rip off the elderly.”
It used to be easier for a senior to know the status of his finances. He could look at his savings passbook and know how much money was in his account. If he had questions, he could walk into the local bank, sit down and talk with someone he had known for twenty years. The bank might now be out of state or entirely online. People do not use passbooks. You must be able to use a computer and access the internet to check your balances.
These technological developments make seniors more susceptible to financial abuse. Elders are also at risk of diminishing cognitive abilities from age, disease, and medications. Today’s high-tech banking coupled with the decreasing cognitive capabilities that can plague seniors, makes them particularly vulnerable to financial abuse. Con artists often use power of attorney forms to rip off the elderly. If you have elderly relatives, you must learn about protecting your loved one from power of attorney scams.
Here is how the power of attorney scam works. An aging adult will sign a power of attorney that gives someone else the authority to handle financial matters for her. That person misuses the power of attorney (POA) document to steal assets from the elderly person.
There can be variations on this scheme. The senior may think she is signing a different document, or may not understand the powers she is giving the other person. The con artist might force the elderly person to sign the document, or may forge her signature. The senior may also know what she is doing, but she thinks she can trust the person she designates on her power of attorney.
How to protect your loved one
It is a prudent estate planning move for your loved one to sign a POA. However, the document should be held by your relative’s lawyer until it is needed. No one should use the POA, while your loved one is still competent to decide for himself. They should not be walking around with a legal document that gives them the rights to your loved one’s assets.
Within the document, include safeguards that limit the person using the POA. State in the document that the person may not transfer any assets to himself, to use the assets for his own benefit or to make a profit from the utilization of the POA. It is also important to require that your loved one’s lawyer must sign off on all transactions over a certain dollar amount and on all real estate transactions. It should be specified that the POA constitutes no gift of the assets to the person named in the document. The person should have to provide regular accountings of your loved one’s assets.
What to do if your loved one was a victim of a power of attorney scam
Time is of the essence. Immediately contact the law enforcement authorities. Do not accept it, if they tell you it is a civil matter. Using a POA to rip off an elderly person can violate state and federal criminal laws against:
- Specific criminal laws designed to protect the elderly
Also contact your relative’s attorney at once. The lawyer can sue the con artist and seek to recover the money stolen, and punitive damages and attorney fees.
These are challenging cases. The laws are different in every state. To learn how you can protect your loved one, talk with an elder law attorney in your area.
AARP Public Policy Institute. “Power of Attorney Abuse: What States Can Do About It.” (accessed August 16, 2017) https://assets.aarp.org/rgcenter/consume/2008_17_poa.pdf
American Bar Association. “Durable Power of Attorney Abuse: It’s a Crime Too.” (accessed August 16, 2017) https://www.americanbar.org/content/dam/aba/administrative/law_aging/
Law 360. “What Attorneys Need To Know About Calif. Elder Abuse Act.” (accessed August 16, 2017) https://www.law360.com/articles/880733/what-attorneys-need-to-know-about-calif-elder-abuse-act