Power of Attorney fraud is a very serious offence. When a person designates a power of attorney (POA), they give that person complete access to all of their finances and financial information. This is important if we can no longer make decisions for ourselves! The POA makes sure bills and living expenses are paid and investments are managed.
Because the POA has complete access to all money and investments, however, this position is sometimes abused. A POA can illegally take money and transfer it to themselves, cash out investments and keep the money, or even sell the family home.
To protect yourself and your money against power of attorney fraud the first step is picking the right POA. Choose someone you trust entirely; a close friend or family member is the most common. Be wary of choosing a ‘new best friend’ to be your POA; there are people who befriend seniors with the specific goal of becoming their POA, just so they can take their money.
Be wary of people who ask to be your POA, and ask yourself these questions before choosing someone as your Power of Attorney:
- What is their motivation in asking?
- Are they doing this to help you?
- Are they hoping to help themselves by accessing your money?
Choose someone who treats money in the same manner you do. If you are a habitual saver don’t choose someone who is a known spender; you want a representative who would make the same decisions you would with your money.
Once you have chosen a POA and they have agreed to the responsibility, get a lawyer to help you draw up the agreement. Make sure the lawyer explains exactly what is expected of the POA, and what the best way for them to fulfil their duties is. It is important all the duties are understood.
Have your lawyer add in an accountability clause; this means that every month, 3 months, or 6 months, your POA has to show your bank statements to another person of your choosing. This way, your POA has to prove they are being responsible with your money. If the numbers don’t add up, or the POA does not meet the accountability agreement, the title of POA is removed.
To reduce the chance of anyone taking your money, set up your payments such as rent, insurance or health care to be automatic. This saves time for your POA and means they don’t need to access your accounts too often.
Don’t set up joint bank accounts with your POA; it may seem to be more convenient but, upon your death, all the money in the joint account becomes property of the POA and cannot be willed to anyone else.
If, once you have chosen and set up your POA, you think they are stealing your money report it to the police. It is not a civil matter but is listed in the criminal code of Canada in section 331. The sooner the problem is brought to the authorities, the sooner it can be stopped.
Tips on Power of Attorney Fraud
- Choose someone trustworthy
- Be wary of someone asking you to be your POA
- Get your POA agreement drawn up by a lawyer and make sure all duties are understood by all parties
- Put in an accountability clause
- Don’t set up joint bank accounts
- Pay bills through automatic payments
- If you are a victim of power of attorney fraud, report it to the police