Do You Have to Keep it in the Family?

Recently, I noted an alarming article in the Washington Post entitled “He had power of attorney over his Alzheimer’s afflicted mother – and stole $332,000, grand jury says.” This article described a woman who named her son, John Jerome O’Hara, as her Attorney-in-Fact pursuant to a General Durable Power of Attorney. The Attorney-in-Fact has the authority, under a General Durable Power of Attorney, to handle financial matters for the person granting this power. Mr. O’Hara, according to the grand jury indictment, mightily abused his fiduciary authority by improperly using his mother’s funds to pay for his own expenses, while at the same time neglecting to pay for his mother’s living expenses. His mother suffered from Alzheimer’s disease and presumably lacked knowledge that her son was taking advantage of her.

Often, we work with clients who assume that they are “supposed to” name family members to handle fiduciary roles in their estate planning. That’s simply not true. Not everyone is cut out for the rigorous task of serving in that role. Generally, we suggest to our clients that they select an Attorney-in-Fact whom they trust, and who is financially astute. If the person they choose fails to fit the bill, the result can be an extreme abuse of authority, such as described in this article, or sloppy instances of missed payments, accidental co-mingling of assets and poor record keeping. More family tension can be created by naming the wrong family member to take on this role, as opposed to going in a different direction.

What are your options if you don’t feel comfortable naming a family member as your Attorney-in-Fact? You can always initiate a conversation with a trusted friend, see if they are willing to serve in that capacity and if so, nominate them as your Attorney-in-Fact. Another great option is to select a professional fiduciary. Thankfully, the Seattle area offers numerous professional fiduciaries to choose from. Do you have to pay them? Of course. But it’s quite likely that the pay would be considerably less than the $332,000 allegedly swindled by Mr. O’Hara. And a professional fiduciary can offer experience, financial acumen and a sense of neutrality that may be quite helpful in navigating emotionally-charged family financial matters.

Do you need help in selecting the right Attorney-in-Fact to address your unique situation? Please contact us,  we would be happy to assist.