Our office was recently informed of a situation with the following facts: A  family member gained access to copies of a client’s estate planning documents and, without the client’s knowledge or consent,  tendered a copy of the client’s Durable Power of Attorney, which designated such family member as Attorney-in-Fact, to the client’s financial institution; the financial institution accepted such Durable Power of Attorney and followed the direction of the Attorney-in-Fact without ever contacting the client to assure that the directions of such Attorney-in-Fact should be effectuated and such Attorney-in-Fact should be added to the client’s account. In addition, the designated Attorney-in-Fact used such Durable Power of Attorney to obtain an additional credit card on one of the client’s credit card accounts and used such credit card to make personal charges.

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Because Florida law does not allow “springing” powers of attorney (i.e. powers of attorney that are only effective upon the signer’s incapacity), many of our clients have executed Durable Power of Attorneys where the originals are held in escrow subject to “escrow letters” that provide that our office will maintain the original Durable Power of Attorney and not release such unless the client instructs us to release it or certain criteria (e.g. incapacity of the client) are met. However, considering these recent events, we recommend the following:

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1. Clients remove the copies of their Durable Power of Attorneys from their estate planning binders (except for the first page) and shred such copies; and

2. Clients ensure that any copies held on a computer or other device are inaccessible to others without the client’s explicit knowledge and consent.

 

The purpose of our office maintaining a majority of our client’s original Durable Power of Attorney and the escrow letter is to avoid such Durable Power of Attorney from being used immediately. However, because of the recent events described above, we believe that it is safer for clients not to have any copies or scans of their Durable Power of Attorney documents that can be accessed by others. Should clients wish to maintain a copy of their Durable Power of Attorney in their binder or scans, we suggest that clients safeguard such documents so that they cannot be taken by the client’s Attorney-in-Fact without the client’s knowledge or consent.

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Clients may want to contact their financial advisor(s) to determine whether anyone designated on their durable power of attorney (past and present) has been added to their financial accounts without their knowledge or consent. Clients should also review their credit card statements to verify that there are no additional cards or charges that they are not aware of. The most effective way for clients to be certain: (i) unauthorized charges are not being made on their credit card(s), (ii) a new credit card is not obtained without the client’s knowledge or consent, or (iii) unauthorized withdrawals are not being made from their financial accounts is to monitor monthly statements rather than to rely on others to review such statements.

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Note: A Durable Power of Attorney does not control assets titled in the name of the client’s Revocable Trust. The Revocable Trust provides the current trustee(s) and designates the process of designating successor trustees. 

 

We suggest that clients complete a Trusted Contact Person form with their financial institution so that their advisor may contact specific persons designated therein in the event they suspect the client is being subjected to financial exploitation. We suggest that clients designate multiple people as Trusted Contact Persons (who cannot withdraw funds but only will be advised if the financial institution has concerns of the client is being subjected to possible financial exploitation) so that if one family member is acting improperly, others will be also contacted who may step in to resolve the situation.

 

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Sample of a Trusted Contact Form: