Discussion:Woe is me
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Discussion Forum Index --> Accounting Questions --> Woe is me
| 13 October 2009 | |
| I have not had a good day. A longtime client lost the ability to care for himself early last year (beginnings of dementia) and his oldest child stepped up to move in and take care of him. This child got a power of attorney over health care and all bank accounts etc. Finally got that person to bring me some year 2008 tax data so I can look at filing a 1040 by Oct. 15th for dad and prepare the past due Partnership (rental property) and Family Trust returns.
This person has taken over $200K from all those accounts during last year. They even cashed in an annuity and took a large loss to increase the cash available. No problems with correctly stated income or tax deductions to flow to tax forms. Just a sick feeling that the siblings and poor dad are being cleaned out. Dad may wind up without enough assets to support him in the years he has left. I believe, at a minimum, I cannot continue in a professional relationship with the child for ethical reasons now that I am aware of this. I feel I need to consult an attorney to explore any liabilities or responsibilities I may have connected to this knowledge. Any one have any words of wisdom? | |
| 13 October 2009 | |
| Oh and I do not believe the intent here was gifts nor do I prepare the grown child's tax return. | |
| 13 October 2009 | |
| google 'elder abuse', AARP has run countless articles on financial abuse of elders. | |
| 13 October 2009 | |
| At a minimum, the local Department of Social Services should be notified so that a proper investigation may be made. You might want to have your attorney do this, as you don't want to have any unauthorized disclosure of tax info issues. | |
| 13 October 2009 | |
| of course, I also believe that this issue has been discussed before, and other suggestions are available via the yellow search box. try 'elder abuse' or 'Social Services' as your first search terms. Good luck. | |
| October 13, 2009 | |
| Sorry to hear that Kathi. Makes for a horrid day, I know. *shaking head and sighing with you* How can people do this? | |
| 13 October 2009 | |
| I'm attending a local AARP Investment Fraud workshop on Wednesday. I'm sure the topic will come up. | |
| 13 October 2009 | |
| Thanks for the advice. It's especially hard because dad was a long time client, great businessman and valued friend to me. | |
| 13 October 2009 | |
| It is MUCH more common than you would think, as the caretaker (child) often feels that 'mom wants us to have a new kitchen' or 'I deserve this for taking care of mom'. | |
| 13 October 2009 | |
| Maybe he is thinking of having Medicaid pay for future nursing home costs. From what I have heard, annuities, in some states, reduce an individual's assets available for nursing home costs. In other states, or in regards to single individuals; annuities do not work. I am not familiar with "proper" Medicaid planning techniques, but I do have clients who shift assets based on what they are told will preserve assets for their offspring.
And, if what he is doing does not make sense, it is also possible he is doing Medicaid planning without competent/any legal advice. | |
| 13 October 2009 | |
| It could hardly be Medicaid planning since it soon disappeared. | |
| 17 October 2009 | |
| Great Question.
As you probably know, this man cannot handle someone's financial affairs based upon a health care power of attorney (unless TX has some very unique law on health POA's that I don't know about). Assuming it's a general power of attorney, the agent must act in the utmost good faith in carrying out the affairs of the principal; and he has only the powers enumerated in the properly executed general POA. No one could argue that an agent should steal from his principal. I would recommend in the future that you use a properly signed engagement letter with the agent. It should be signed something like this "Benny Doe, as Agent for Father Doe, under Power of Attorney dated X".* This makes it clear that your client is Father Doe, and that Benny Doe is acting as an agent. Then, keep the engagement letter, and a copy of the POA for your file. If your client is father Doe (as it should be), you have a much clearer view of what you might want to do to protect that client AND more importantly, you will have proof that Benny Doe is NOT your client, and that you owe Benny no duty to keep any true information private about Benny (I say true, because obviously, you cannot pass false information about anyone). Run this by your local attorney, he can give you more complete advice, and he may want to help you draft a better engagement letter to use in these situations. This will be a much more frequent occurrance in this day and age with the growing elder population. .*he would actually sign Benny Doe, and under it, this stuff should be typed. If you have a secretary or other person around, they should witness the signature of the agent, and note that they were a witness on the engagement letter. You should not be the witness, though, of course you might be a signatory to the letter. One of the first questions I always ask myself is: who is my client? | |
| 17 October 2009 | |
| Great info for me Crow so thanks. I am calling my attorney for an appointment on Monday (letting the dust settle from tax prep duties for now). Yes its a general POA. It disturbed me to think I could have a duty to prepare a gift tax return but I sincerely believe the facts I discovered do not represent any gifting. Dad's mental abilities are not even capable of understanding and making a valid gift. | |
