A power of attorney (POA) is a powerful legal tool that grants one person the authority to make legal decisions, such as those related to health and financial matters, on behalf of another individual. When placed in the right hands, a POA is an important way to ensure that people who are temporarily or permanently incapable of making their own decisions have somebody they can trust to make those decisions for them. However, POAs are also rife with abuse and, when placed in the hands of unscrupulous or greedy individuals, they can quickly lead to scams and fraud. Here are five ways to spot a possible POA scam.
Too much power?
In many cases, an individual needs only grant power of attorney to another person for limited duties or for a temporary amount of time. For example, if a person injures herself, she may grant power of attorney to a neighbor to have that neighbor renew her driver’s license while she is incapable of doing so herself. However, the neighbor may take advantage of the situation and have the injured woman agree to a POA that grants the neighbor complete access to her bank accounts. If somebody seems to have more power than appears warranted given a certain situation, then POA abuse may be occurring.
The “caring” nephew
Another common scam occurs when an elderly person has a mishap and suddenly a long-lost relative, such as a nephew or cousin, shows up offering condolences and support. Soon, this “caring” nephew convinces the elderly relative to sign over a POA so that the nephew can provide better care. What often ends up happening is that the supposedly concerned relative ends up using the POA to raid the elderly relative’s accounts.
Another tactic that a greedy relative or friend may use is to convince an elderly person that they can substantially increase their retirement savings if they allow that money to be invested in a “sure fire” business opportunity. This relative may place the money into their own highly speculative venture, which in many cases not only fails to produce the promised returns but also leaves the elderly individual with little left in his or her accounts.
Elder abuse is a growing problem and one in which POAs can play a powerful role. Somebody who abuses a POA violates not only the trust an individual has placed in him or her, but also breaks the law. Proving such abuse is happening could be key to revoking power of attorney and ensuring that elderly loved ones are being cared for properly and with respect.