Power of Attorney

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. The attorney-in-fact must keep a record of all transactions performed for you six years after the transaction.
  6. 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.
  7. 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.