You Can Trust Your Children, Right?

Jane recently called the law office of an Estate Planning attorney to ask a few questions.  Evidently, Jane was one of five children.  Her mother had been ailing for some time and her oldest brother, Bob, had been her mom’s power of attorney.  Jane and her siblings became concerned because mom was complaining recently that she didn’t have any money.  The children knew she had over $500,000.00 after the death of their dad. 

When they began to look into it, it appeared that Jane’s oldest brother had been taking mom’s money over the past several years.  Jane asked the attorney what could be done.  The attorney quickly explained that the statutory power of attorney that her brother had did not authorize him to “self deal”.  This means, Bob could not have used his power of attorney to take mom’s money, and put it in his own name.  Upon further investigation, they learned mom had personally signed checks over to the brother.  While mom asserts she did not intend to do any such thing, Bob’s influence exerted over her was sufficient for her to have legally transferred those assets.  Jane asked what her mom’s recourse was.  The attorney explained her only recourse was to somehow prove “undue influence” or “duress” over mom by Bob.  This would be a lengthy, time-consuming and expensive legal proceeding, the outcome of which was far from guaranteed. 

The attorney explained that, many times, elderly parents trust their children and rely on their judgment and do as the children suggest.  In other cases, it is discovered that the power of attorney used their authority to benefit themself.  Even though self dealing is not authorized by the power of attorney, often the assets are already gone and there’s no way to recover them.  The attorney explained that proper planning and the protection of mom usually should involve more than one of the children.  Unfortunately, Jane did not have many viable options.  After Jane discussed this matter with her mother, mom was not willing to “sue” her son to get the money back.  Coincidently, Bob was no longer around to support mom.  The other children had to step in to help.  The worst of it was that the family was destroyed, likely, forever. 

Don’t let this happen to you.  Work in a team approach with an Estate Planning Attorney to properly utilize the strengths of the financial advisor, the attorney, and the family members, to ensure your clients’ needs are met and the family relationships are maintained.

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