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Wednesday, November 17, 2010

What if the executor sees fraud by power of attorney?

This is another reader question. I seem to be starting most of my posts this way lately (which is great, keep 'em coming). Someone asked about an executor who believes that the person who had been acting under a Power of Attorney has perpetrated a fraud against the deceased. Specifically, the reader wanted to know whether the executor has the right to look at the Power of Attorney's records.

Yes, he does. When the deceased died, his or her Enduring/Continuing Power of Attorney came to an end. The attorney acting under the Power of Attorney was then under a legal duty to account to the executor for his or her care and management of the deceased's financial affairs. An astonishingly high number of people acting under Powers of Attorney seem to think that they are entitled to do whatever they want with someone else's money, including taking it for themselves, and the accounting to the executor is often where they get caught out.

If I were an executor in this position, I would consider the fact that one day soon I would have to divide the estate among the beneficiaries and explain to them why the estate is smaller than everyone thought. Are they going to believe me when I say the loss was not my fault but that of the attorney, when I made absolutely no attempt to make the attorney explain the loss? I doubt it.

An executor is in a legal position to demand an accounting, and may request additional back-up evidence such as bank statements, receipts, cancelled cheques etc. If the attorney refuses to co-operate, the executor may end up asking the court for help. Fraud is fraud. The fact that a person was appointed attorney under a Power of Attorney makes a theft worse, in my view, because it involved taking advantage of someone who trusted him.

13 comments:

  1. I'm a co-executor with my cousin who looked after my father in Ontario as he was dieing, she was also appointed power of attorney for finances. She claims to not know what happened to his wallet at death. Two days before my father died, he withdrew $2000 from his bank, there were also other cash withdrawals that she does not know what happened to. My father was too weak to walk or drive without her. How do I get her to account for the money?

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  2. Is she willing to call the police and report a theft of the wallet? Because if your dad didn't take out the money and neither did she, obviously it's been stolen. Perhaps suggesting that the police be involved will help her "remember" what happened.

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  3. Thanks Lynne, Your advice is brilliant, and also something I should have been able to think of myself. I will politely give it a try. Anonymous Nov.17,2010 4:10 PM

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  4. Just a couple questions ... my father passed away when i was about 5 and he was about 21, he was not with my mon anymore and there was no will, apparently my grampa took care of everything i am wondering 1 of 2 things how do i go about making sure everything has bin done right and all money was split between my brother and i and none of it was kept by himself .. the other question is my dad had a deed for 40 acres of land in his name when he died.. my grampa told my mom that he was going to split it between my brother and i in the will or estate, my grampa then came back to my mom at a later date and told her that he lost my dads property in gambling , how do i proseed with this.... It not right and i find it very disrespectful to my father

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  5. are there any time limitations to recouping theft of monies from an executor? I am in ontario.

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  6. Hi Lynne

    I was appointed POA for my mother in 2006 - she was healthy, still working, living on her own, traveling, living in and maintaining her own home....she became ill in 2010 and passed away in 2015. I have accounting records from 2010-2015, but not prior to that. My family is asking for financial records from 2006-2010 - I have no idea what my mother would've done with them....she was of sound mind until she died... I acted once she became ill - only because she has lost her vision....

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  7. Hello Lynne
    I was appointed POA for our father in March of 2015. Brother 'A' rented home to our father. I consulted with brother 'A' that the arrangements were too costly for our father and that he required special care (diagnosed with cancer). Brother 'A' would not work with me so I handed POA over to 'A' in a signed letter. 'A' took over bank accounts and committed fraud up to and beyond our fathers' passing. I took over as Executor. 'A' committed fraudulent activities and did not follow POA rules. 'A' refuses to answer the Estate Attorney's letters and is not signing a release for me to finalize the Estate. 'A' believes the Estate still owes 'A' money for services where I see that 'A' has taken more than his share of the Estate thru fraudulent activities. The Estate is under $40,000.00 and 'A' states, "I don't care". 'A' wants the Estate to diminish for all that are concerned because he has his money already thru fraudulent activities. 'B' is siding with me. What is the proper thing to do in order to proceed with the Estate?

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    1. You are in a very tenuous situation here. Where did you get the idea that you could walk away from being POA just by signing a letter? The proper way to quit being a POA is to ask the court to dismiss you and pass your accounts. If you had done that, you would be in a stronger position because right now it looks as if you just washed your hands of it and let someone dissipate the estate while you were supposed to be looking after it. There is also no proof, I assume, that it was actually "A" who took money and not you.

      The best way to straighten out the issue of "A" not signing a release is to apply to the court to pass your accounts. That dispenses with his signature. It may also result in other court orders about who owes what to whom. It's going to be tangly, but that's your best option, in my opinion.

      Lynne

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  8. My Mother passed away Jan 2017. Prior my Sister was named Enduring Power of Attorney & Medical Representative. Convinced my Elder Mother to have Joint Account. Prior to the Sale of our Family home she filed a New Will. She and Her Husband are name Executor and 2nd Executor ( reason I was removed is that I live in next province ) When I was in BC for Memorial service I received copy of Death Certificate and Copy of the Will. When I asked to see the expenses of the Funeral ( which was paid by Mother on a Insurance Package purchased in 2005 ) I was told not to worry about it everything is taken care of . No record of accounts has ever been shown. Since my return home she is stated No Probrate is Needed that she wanted my SIN # and sending papers from her Finiancial advisor so she will release money to me and to Trust her that she was a Business Woman and has worked the funds. When again request Accounts and Why she was doing this before Certication of Clearance I was told to Trust her. Note She has redone her deck $$$ and will be taking a trip at end of month. I was given My Mother final bank Balance the day before she went into my Sister Care and with estimated Calculations there is APPX 17 to 20 thousand missing. This is too rushed and suspicious.

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    1. I find it a bit absurd to say "no record of accounts has ever been shown" when your mother hasn't even been gone for a month. And at the same time that you're complaining that the executor is taking too long to give you information, you are stating that it is "too rushed and suspicious". I get the feeling that no matter what your sister does or doesn't do, you're not going to like it. I can't support the leap of logic that leads you to assume she has stolen the money for her deck and her trip.

      I agree that "trust me" is not a very satisfying answer to someone who has asked for information. However, you were voluntarily given a copy of the will at the earliest opportunity. She has kept you in the loop as to what is happening. She has told you that the expenses for the funeral were paid by an insurance package and are therefore not coming out of the estate. If you're a beneficiary of the estate you are entitled to know what is coming out of the estate but you're not entitled to second-guess everything the executor does that isn't even impacting the estate.

      I think you're over-reacting. If you disagree, perhaps your best plan would be to sit down with an estate lawyer to go over the paperwork you have and talk about your concerns.

      Lynne

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  9. This comment has been removed by the author.

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  10. fraud starts with the attorney.....
    be aware of living trust scams by attorneys.....

    they promise everything yet render nothing.....

    in my parents will....it states in clause 1.... i revoke all wills and testamentary disposition <---no more wills

    in a will you declare your will...its opened after death..... and new copies are submitted any time....

    now here is the scam....they tell them their assets are ok..... yet they never appoint the trustee till after death....
    no living trust is set up for them....
    now a living trust has strick accounting rules....with rev canada....like annual reports to its beneficiaries....

    this where the money and assets go up in smoke.... your old parents sign off before the attorney....yet its not being executed <---- fraud scam them
    the hide the documents and play head games.... now when your parents die where are the documents <---now the attorney dumps it in his retainer the dumps money after they are dead to run pro-bait court on a living trust...

    ohhh your mother sold the home and when into the manner and died....

    when do the start keeping logs...after death.....they string the old people along ruining scams without records this way..... your mother sold the house not me.. yet the attorney never executed the living trust file...... yet flips homes buy and sell events on its assets .....

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    1. Wow. This is complete gibberish. The one thing I can actually understand out of all this is that you think the "attorney" we're talking about is the lawyer (I assume so, because you mention "his retainer"). We're not. This post is actually about Powers of Attorney. Only in the USA are lawyers called attorneys.

      I deleted your other post because it was even more nonsensical than this one. The lack of actual sentences makes it pretty tough to follow. The only reason I allowed this one to show up is that I wanted to correct you on your misconception about attorneys. Kindly don't send me any more messages like this, as they won't be posted.

      Lynne

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