How to protect your or your loved one's assets

We ran a recent story about an elderly lady who was taken advantage of by a daughter-in-law who wiped her clean of her life savings. As a power of attorney, the daughter-in-law had full access to the checking account. But instead of just writing checks for expenses, the money was withdrawn for personal use, erasing an over $400,000 bank balance.

What is the best way to protect your’s or a loved one’s assets? How can you prevent someone from abusing the power?

After reading the article in the newspaper, a customer stopped in the office and shared a similar story about a friend. By having a conservatorship, he said, these situations may have been avoided. 

Powers of Attorney (POA) and Conservator documents allow a person you appoint to act in place of you for financial purposes should you ever become incapacitated. But, which is best for you?

According to Lee Johnson, Johnson Law Office, P.C. in Ogden, the amount of assets you have and if there are any children, close family members you can trust with your finances, can be a determining factor.

“If you don’t have substantial assets, a conservatorship can be cost prohibitive,” says Johnson. “Because a conservatorship goes through the court, you have initial court costs, continuing court costs when filing annual reports, then the order approving the annual report. You have attorney’s fees as well.” The advantage of this  is there is documentation of financial disbursements. “But, nothing is fail safe,” he says. “If people want to embezzle bad enough, they may go as far as keeping another set of books to hide the embezzlement.” Although it accrues additional expense, the court can require the conservator to post a bond as extra protection.  

Johnson says the majority of people will choose the more common “Durable Power of Attorney” because they have children they entrust with their affairs. That document is usually drawn up and signed when he meets with clients to establish a will.

While both Power of Attorney and Conservatorship provide an individual with the authority to make decisions regarding financial matters of another person, a POA is executed in advance of incapacity, while a conservatorship happens upon petition to the court after an individual is no longer able to competently make important financial decisions. 

Read more in the June 21 issue of The Ogden Reporter.

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