This morning I dealt with a question about a customer who was acting under an Enduring Power of Attorney for his mother. Mother has an investment account at one of our branches. The son came into the branch with the Enduring Power of Attorney (and there are no questions about its validity) and wants to use it to put his name and the names of all his siblings on his mother's account.
He's getting pushback from the personnel at the bank, and is wondering why. His point of view is that his mother gave him full control of all her money and he can do whatever he wants with it.
The problem is that an attorney under an Enduring Power of Attorney is supposed to be acting in the best interests of the person who appointed him or her. How is putting a handful of names on his mother's investments acting in her best interests?
I think this customer is looking ahead to the day when his mother passes away, and believes that putting the funds in joint names would ensure that they pass equally to all of the children. However it is the nature of joint funds that works against him while his mother is alive. The fact that the funds are joint means that any one of the people whose names are on the account has access to the money. This is certainly not in the mother's best interests to have her nest egg vulnerable like that. And if you think a person's own children won't take her money, think again. Statistics are against you on that one.
There is also the whole issue about imposing estate planning on the mother. If she has made a Will, she may have left those investments to someone. It may or may not be her children equally. The son should not try to circumvent the mother's right to choose what she does with her estate after she passes away, as that is not in her best interests either.
I don't believe this customer is greedy or in any way dishonest. I think he is not aware of the limitations of an Attorney under a Power of Attorney. He isn't alone; it's not really a well-understood job. Anyone taking on this role should realize that every single transaction he or she makes with another person's money must be in that person's best interest. Perhaps he also doesn't realize that if one of his siblings takes the mother's money, the attorney might be personally liable for the loss.
If you are acting as an attorney, please ask for guidance.
He's getting pushback from the personnel at the bank, and is wondering why. His point of view is that his mother gave him full control of all her money and he can do whatever he wants with it.
The problem is that an attorney under an Enduring Power of Attorney is supposed to be acting in the best interests of the person who appointed him or her. How is putting a handful of names on his mother's investments acting in her best interests?
I think this customer is looking ahead to the day when his mother passes away, and believes that putting the funds in joint names would ensure that they pass equally to all of the children. However it is the nature of joint funds that works against him while his mother is alive. The fact that the funds are joint means that any one of the people whose names are on the account has access to the money. This is certainly not in the mother's best interests to have her nest egg vulnerable like that. And if you think a person's own children won't take her money, think again. Statistics are against you on that one.
There is also the whole issue about imposing estate planning on the mother. If she has made a Will, she may have left those investments to someone. It may or may not be her children equally. The son should not try to circumvent the mother's right to choose what she does with her estate after she passes away, as that is not in her best interests either.
I don't believe this customer is greedy or in any way dishonest. I think he is not aware of the limitations of an Attorney under a Power of Attorney. He isn't alone; it's not really a well-understood job. Anyone taking on this role should realize that every single transaction he or she makes with another person's money must be in that person's best interest. Perhaps he also doesn't realize that if one of his siblings takes the mother's money, the attorney might be personally liable for the loss.
If you are acting as an attorney, please ask for guidance.
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