There seems to be a never-ending list of scams directed at the elderly. A particularly concerning type is Power of Attorney scams, especially where the scammer is unknown to the person. In a Power of Attorney scam, a person obtains a Power of Attorney, and misuses their powers to improperly and illegally gain some form of advantage for themselves, typically a financial advantage. The possibility of a legitimately appointed attorney doing this is a concern to anyone engaged in the process of Estate planning. We have in the past discussed the concerns of Power of Attorney scams being perpetrated by friends and families of a grantor, who use legitimate Powers of Attorney in order to steal assets.

When a stranger illegally obtains a Power of Attorney, the initial contact with the elderly grantor often occurs prior to the point when the grantor becomes incapable. They may be pressured to sign a Power of Attorney which is different in scope than that which they believed they were signing, a document that purports to be a something else but is in fact a Power of Attorney, or another document entirely which is then used as a template for forging a signature.

Lawyers in the United Kingdom brought public awareness to the possibility of fraudsters using falsified names and addresses in order to aid them in obtaining a Power of Attorney over complete strangers. Of particular concern is the Lasting Power of Attorney, or the Continuing Power of Attorney as it is called in Canada. This type of Power of Attorney allows the attorney to continue to manage aspects of a person’s life after they become incapable of making those decisions for themselves.

The creation of a Lasting Power of Attorney in the UK is a form-based system, whereas in Canada, a Continuing Power of Attorney is often drafted by lawyers, who typically keep a copy of these documents on hand in a fire-proof safe. However, in both Canada and the UK, the identity of the appointed attorney does not need to be verified at the time the Power of Attorney is executed, and if a Power of Attorney is fraudulently created, it can be difficult to discover this until after significant fraud has occurred. Additionally, while a Power of Attorney created in the ways described above is void, innocent third parties may rely on it and may carry out business with the fraudster based on it.

There are cases where the assets will be impossible to recover, as in cases where the asset has been destroyed. Another situation is where an innocent third party operating in good faith sells real property fraudulently sold to them by the fraudster, and as a result the victim of the fraud would not be able to recover their title in the property. Because of this, obtaining title insurance is important, as it may help protect elderly homeowners in this type of situation.

However, if this type of fraud does occur, or if you have suspicious that someone may have improperly obtained a Power of Attorney from you, you should speak with a lawyer as soon as possible, to determine which assets in question may be able to be recovered. While victims of fraud often feel shame, this type of crime is complex, and difficult to detect. Reporting the scam is the first step to rectifying the situation.

Thank you for reading.