One of the questions that I get when dealing with the family members of a senior citizen is “how much control do I have, now that I’m the ‘power of attorney’ for Mom?” First, I usually restrain myself from correcting them: “You’re not Mom’s power of attorney, you’re her ‘Attorney in Fact.’” Next, I will often ask, “Why do you ask? What is it you wish to do?” I want to be sure that the newly appointed attorney in fact knows that I am interested in what actions they take.
The fact is, the attorney in fact who Mom appoints can do just about anything Mom can do. That is pushing the door wide open.
Can the attorney in fact move Mom from one nursing home to another? Yes.
Can the attorney in fact cash in all of Mom’s investments? Yes.
Can the attorney in fact pay themselves a hefty fee? The PEF code, section 5609, does permit a reasonable fee, and the meaning of “reasonable” is a discussion for another time. But herein lies the biggest problem of appointing an attorney in fact. Who is there to watch what the attorney in fact is doing with Mom’s money? Unless oversight is built directly into the document requiring the attorney in fact to report to some third party, there is no one watching the attorney in fact.
The answer is simple: create an automatic oversight, right in the document, which requires the attorney in fact to report, at least on an annual basis, to a third party. A simple written recitation is all that is required. The next time, we’ll talk about what the attorney in fact’s recitation is all about, and how it protects both the Principal and the attorney in fact.