When we hear stories of the abuse of power of attorney document, we’re often amazed at the gall and boldness that accompany the actions of the attorney in fact (the person who is appointed on the power of attorney document). One of the main reasons that Aunt Gertrude chose her niece Milly (our two fictitious characters for purposes of this blog) as her attorney in fact was that she trusts Milly to do the right thing.
An attorney in fact has a duty of loyalty to the person who appointed her (the principal). So Milly owes a duty of loyalty to her Aunt Gertrude. Milly’s actions have to be in favor of and for the benefit of Aunt Gertrude. In fact, most power of attorney documents include an “agent’s acknowledgement” which the agent must sign. It affirms, among other things, that the agents actions will always be for the benefit of the principal (i.e., that Milly’s actions will always be for the benefit of Aunt Gertrude.
So if Milly had not seen her Aunt Gertrude for seven years (but was still listed on her aunt’s power of attorney document) and then changed the beneficiary of Aunt Gertrude’s annuity from what it was to herself, that would not be in her Aunt’s best interest. In fact, it would be self dealing by Milly.
Milly should not take such actions. Milly has to keep Aunt Gertrude’s interest above her own. We have seen this exact scenario play out. It’s sad. People take advantage of the weakest among us. Be vigilant. Help the seniors in your life. Please don’t stand idly by and watch while Milly robs Aunt Gertrude blind!