When an attorney in fact (the person who is appointed as the agent through the power of attorney document) walks into the investment adviser’s office and says “My Aunt Gertrude would like to change the beneficiary on her investment accounts,” is she taking an action that she is allowed to take?
If Aunt Gertrude has executed a power of attorney document and named Minny as her attorney in fact, then the answer is very likely a resounding YES! Consider the following exchange:
Financial Advisor: “And who might you be?”
Attorney In Fact: “I’m Minny, my Aunt Gertrude’s Power of Attorney” (they always call themselves that), and hands to the FA a perfectly legal power of attorney document and her valid driver’s license.
FA: “Who will be the new beneficiary of these investment accounts? Your Aunt Gertrude has a sizeable account and had previously left it to charity.”
AIF: “It will all be left to the name on this paper” and hands another document to the FA.
FA: “But this is your name” he says, looking surprised.
AIF: “Yes, that’s right. It all goes to me.”
This might sound like dialogue from a bad soap opera, but it happens all the time. If you know a financial investment advisor, ask him (or her) if they have ever met someone who has done exactly what Minny has done here.
We’ve talked earlier about the need to choose the right person to be your attorney in fact. Today we’ll address what to do when you suspect or know that the actions being taken are not in line with what the principal wants or are clearly not in the principal’s best interest.
If you have executed a power of attorney document and appointed an attorney in fact, and you are still in control of your own actions and sui juris,# then you are the master of your own fate. If you have appointed this person as your attorney in fact, you can withdraw that appointment. The power of attorney document is not stronger than your own will, assuming you are mentally competent and sui juris. You need only inform the attorney in fact that he is no longer your attorney in fact. I recommend you consult with your attorney to execute any documents deemed appropriate in order to effect the removal of the attorney in fact.
If you are aware of a “Minny” who is changing beneficiaries of investment account for an “Aunt Gertrude,” and you know (or strongly suspect) that the actions are intended for Mnny’s own benefit and not for Aunt Gertrude’s benefit, you should act as deliberately as if you were Aunt Gertrude herself.
Minny, as the attorney-in-fact, owes a duty to Aunt Gertrude. A duty of loyalty, of honesty, and a duty to be seeking Aunt Gertrude’s best interests, not her own. You can certainly question Minny openly about the actions she is taking. You can speak to Aunt Gertrude about Minny’s actions. You can assist Aunt Gertrude with phone calls or visits to ensure that her wishes are being followed. You need not feel that you must take legal action in order to help Aunt Gertrude. Neither should you take the position that “it’s none of my business” and allow Minny to subvert Aunt Gertrude’s intentions.
“All that is necessary for the triumph of evil is that good men do nothing.”
So what if you suspect that a Minny is afoot with evil intentions? Approach Minny. Approach Aunt Gertrude. Approach the financial advisor and ask him (or her) if she has talked with Aunt Gertrude about the changes. The financial advisor will, of course, not be able to share any information with you. But your questions may be enough to raise suspicions that cause the FA to take action.
We’ll continue to look at the Power Of Attorney document, but I would love your comments. Please share your stories with us so that we all can learn from each other’s gains and losses.