When choosing a person to be her attorney in fact, our Aunt Gertrude (read prior posts to learn more about our dear Aunt Gertrude) must find the person whom she trusts. Aunt Gertrude has to be comfortable with having this person make decisions that are in her best interest.
Last time we discussed some of the checks and balances that are already in place. . .the Agent (in our case, Aunt Gertrude’s niece Milly) must take actions which are in her aunt’s best interest. The agent must be loyal to her aunt and be ready to give an accounting for all of the actions which she has undertaken for her aunt. The Agent’s Acknowledgement can be a powerful tool. . .if someone asks.
But what if no one asks?
“Oh, we know that Milly loves her Aunt Gertrude. Milly would never do anything wrong.” Or “I don’t want to get involved in a family matter.” These are the types of comments the attorneys hear when trying to sort out a mess after the fact. .
One small change that can help is to add language to the power of attorney document which requires the attorney in fact to report his actions, taken on behalf of the principal, to a third party. And make that report simple. A “yellow pad” report is fine, as long as it is supported with receipts, cancelled checks, etc.
If Milly goes shopping and buys groceries for her Aunt Gertrude twice a month, she must show the receipt and the cancelled check or the check register to a third party. How often? It’s up to Aunt Gertrude, really, but to be safe, make it no less than once a year. Put the language in your power of attorney document.
Who is the ‘third party’ that she is reporting to? Again, it is up to Aunt Gertrude, but your attorney is the natural choice. It was he or she who helped Aunt Gertrude to this point. Appointing a professional like an attorney or a CPA will put Milly on notice that someone is going to look at these receipts. Someone is actually going to see her purchases.
The Agent’s Acknowledgement is fine, but only if someone ever looks at the actions Milly has undertaken for Aunt Gertrude. The yearly review uses the strengths of the Agent’s Acknowledgement, requiring the attorney in fact to share information about her actions with an outside party.
Please let us know how your Aunt Gertrude is faring. We want to hear your stories. We will be happy to share the specific language we use in our Power of Attorney Documents. Contact us.
