Paying close attention when giving a power of attorney

On Behalf of | Mar 20, 2020 | Uncategorized

An Illinois power of attorney basically means that a person is trusting another with financial decisions to the fullest extent. If the person with that power has not been fully vetted or is not closely monitored, the consequences of this can be disastrous. This is the lesson that two retired athletes learned the hard way.

The pair of athletes met someone posing as a financial advisor. In reality, her identity was a constructed fiction, and she took great measures to gain the athletes’ trust. She offered her financial advisory services to them free of charge, convincing them that her sole intention was to help them build generational wealth. In reality, she was embezzling their money and stole millions from them.

One of the lessons to be learned from this is to always investigate a person thoroughly before giving them a power of attorney. In this case, a person would have only needed to ask whether this advisor was bonded. Then, an investigation would have revealed that her identity was fake. The second lesson is to always closely scrutinize financial statements and ask questions if anything seems wrong with account balances or the listing of transactions. Fraud generally occurs when the victim blindly trusts someone else and does not closely check what they are doing. Scrutiny often uncovers fraud early in the process.

In order to devise a long-term financial plan that looks at all parts of the picture, a person may consult with an estate planning attorney. The attorney may be able to explain how to properly vet a financial adviser and place limits on the power of attorney to better protect their clients. Many people are afraid of financial issues because of a lack of knowledge, but an estate planning attorney may help educate their clients and empower them to deal with this process.