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The Power of the Power of Attorney

| August 10, 2015
Financial Planning

I am on a little bit of a soap box about this lately, but for very good reason. We have encountered a few situations that one could hardly imagine. They have been stressful, cumbersome and worst of all--absolutely gut-wrenching.

I want to share a story with you today that I hope will motivate you to at least take a double take in regard to all of your legal documents: For almost 20 years we have had the privilege of building a friendship as well as a business relationship with a gentleman of outstanding character and integrity. We worked together to help plan out his retirement and encourage him to stay the course with this plan through what some would call the 'go go' years of retirement. About a year ago his health began to fail. To our surprise and rather abruptly, we received a phone call from a strange man claiming the durable power of attorney was enacted for this due to an abrupt state of mental decline and it was him. Well, anyone who has worked with us knows we are a stickler for keeping all of the legal documents for every person we work with on file. He was on none of these and in none of our notes. This was a recent change. So...we did our due diligence. Having only one relative and no other family members, we called that relative. We also called the friends who we had been listed in our fils as his powers of attorney. It was legitimate. This was a gentleman she went to church with that held a very well known professional designation. So nothing to worry about... right?

As we would do in any situation, we offered up our help to whatever extent it was needed over and over again. We would help call the long-term care carrier even though we were not the agent who held the policy. We would help with the long-term care facility. We would help with the budget. We would help brainstorm for decisions to be made. In the end, it didn't matter. Our assistance was refused for whatever reason. Instead, we were sent requests for amounts of money that was six times the normal cost of the long-term care facility without any help from insurance (which he had). This was requested month after month. At the rate the withdrawals were being requested, our long-time friend would run out of the money he had intended to go to his only surviving relative and his church in a little more than two years. And our hands were tied.

Once again: when you name a durable power of attorney and it is enacted, it means that they will become you in every financial decision. They can sell your home, they can buy a car, they can put your money in 'their' bank account. Which means you better be dang sure that you know and trust the person you name as yours. To clarify, you trust that person to have the competence to take care of your financial situation, the humble nature to ask for help when it is beyond their capacity, and the integrity to do what you would want them to do. If that someone doesn't fit ALL of this criteria, don't name them. You have other options--we have other options. Bottom line: Take a double take on "who" you have named as your power of attorney.