Lately, the matter of Brooke Astor’s estate has been covered in the media. Like many people she had an estate plan in place which included a Durable Power of Attorney and Health Care Proxy, which nominated subsituted decision makers in the event she would lose the capacity to make important financial and/or medical decisions at some point during her elder years. She did not want to burden her family with obtaining a Guardianship and/or Conservatorship through the courts. She did end up suffering from Alzheimer’s disease and her son took over her financial powers. He just didn’t do a very good job…
The following is an excerpt from this week’s AZCentral.
Anyone who has signed a financial document has to be squirming a bit over Brooke Astor’s estate case.
Her son, Anthony Marshall, recently was convicted of stealing millions of dollars from Astor while she suffered from Alzheimer’s disease before her death. Although the case largely centered on a contested will purportedly signed by Astor, other estate-planning issues also came into play.
One was a financial power of attorney signed by Astor that gave Marshall authority to direct her affairs if she became incapacitated – and the means to steal from her.
The episode provides a wake-up call for people who use financial powers of attorney. These legal documents can be highly effective in ensuring that someone else will be around to handle financial matters for you if you’re alive but unable to do so – as in the case of mental incapacity.
A power of attorney can be as short as a page or much longer, depending on the detail desired. They’re often included with a trust, will, health power of attorney (addressing medical issues) and other estate-planning documents.
For all the benefits of using a power of attorney to avoid a potential court-supervised conservator situation, there are pitfalls, too.
In particular, you need to trust the person whom you designate to act on your behalf. And you should make sure he or she is responsible, diligent and reasonably astute.
“They really are documents that people should pay attention to,” said Denise McClain, a financial principal and attorney at wealth-management firm Lowry Hill in Scottsdale. “You’re potentially passing along a lot of power.”
