Can Agent Override Decisions of Person Granting Power of Attorney?
Con artists often target the elderly because isolation and declining cognitive ability makes them more vulnerable to fraud. Consumer Reports estimated that seniors and their families lose $3 billion to more than $30 billion to fraud each year.
Con Artists Target Seniors
I learned of a real example of such a fraud from a woman who contacted me after her parents had lost their entire retirement savings to con artists.
The con started with an email from someone claiming he was attorney representing a client who had died in a tragic accident with his entire family. The email claimed that they were distantly related to the deceased and would be inheriting his vast fortune. To receive the funds, tall they had to do was provide bank account information.
Apparently, her parents shared details of the scam with family members. All family members raised concerns and advised advised them not to send any money. However, her parents disregarded their advice and are now facing the consequences of their bad decision.
Can Agent Override Powers of Principal?
To prevent future fraud, the woman wanted her parents to sign a power of attorney. She wanted to require that all financial institutions dealing with her parents ask her permission before releasing any funds.
A friend told her if she were named an agent under a power of attorney, she could override her parents’ decisions.
That is incorrect.
A Durable Power of Attorney allow a principal to appoint an agent to handle their financial affairs. However, signing a power of attorney will not restrict the principal from making financial decisions or conducting business for himself. This is true even if the principal makes decisions that the agent believes are harmful.
In situations where there is a conflict between the principal and the agent, the principal’s decisions control.
For tips on protecting the seniors in your life from fraud, read: Tips for Preventing Elder Fraud.
This post was originally published on July 27, 2016 and updated on June 9, 2020.