Pennsylvania residents who are 18 or older are encouraged to create a power of attorney document. This document authorizes another party to manage an individual’s affairs, and it typically goes into effect when a person becomes incapacitated. However, it can take effect whenever an individual wants it to. For instance, business owners may allow someone else to oversee their personal finances so that they can focus more on running their companies.
However, those who are considering power of attorney documents are advised to be careful who they select as their agents. They are also encouraged to be careful as to how much power their agents are given. This is because a broad financial power of attorney agreement could allow a representative to open or close bank accounts or have access to other financial information. Therefore, individuals could be vulnerable to financial fraud.
Basketball star Dennis Rodman lost $1.2 million to a woman who acted as his power of attorney. Other athletes also were conned into giving the woman power of attorney over their finances and also reported losing money. The woman was eventually sentenced to 10 years in prison for her actions and was also ordered to pay $5.8 million in restitution to her victims. Individuals may be able to protect themselves against fraud by dividing powers of attorney between multiple people.
A power of attorney is one of many potential estate planning tools that a person might be able to utilize. Those who are curious about creating a power of attorney or other plan documents may benefit from speaking with an attorney who has experience with these matters.