Several years ago I was given a durable power of Attorney over an elderly friend. She had a form of anxiety that kept her from functioning. Everything has been going fine for years.Her bills are paid and she can live a nice life without worry, I take care of everything, or so I thought. Last week I got a call from a collections agency. Last year she signed a contract for a truck for her nephew. Not cosigned, she had the truck in her name and he paid the payments and drove the truck. She also cosigned a personal loan at her bank last year for another kid. He paid the payments to the bank.I was not aware of either loan. Well, in November both of them quit paying on the loans. Now the collection agency's are calling her. She's now in the hospital with a severe nervous breakdown. She can't even talk.
It was my understanding when the Attorney did the POA paperwork, that she could no longer legally enter into a contract of any kind. The one that really irks me is her bank. They knew she could not legally enter into any contract because they had a copy of the POA and she was not even allowed to withdraw money from her accounts without my signature.But they would let her cosign a loan and not bother to tell me.
These creditors are now wanting to attach her accounts and properties for the loans.
Can I just call up the creditors and say she had no legal right to sign a contract in the first place?
I mentioned this fact to her bank this morning as I closed her accounts and transfered them to another bank. Next thing I am getting calls from the banks legal department wanting to get some "clarification" on the issue.
My attorneys secretary said that as far as she knew, the contracts would not hold up in court. She likened it to a car salesman selling a sports car to a 6 year old. But my attorney has the best advice and he won't be back from Europe for 9 more days.
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posted: Feb. 26, 2008 @ 8:11p
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posted: Feb. 26, 2008 @ 8:27p
We're going trough a similar issue with my grandfather (Alzheimers). He has a parcel of land in texas, worth approx $800,000 that he's selling (and also maintaining mineral right too) and a Texas court refused to recognize a Virginia Power of attorney form because it was "several years old"
IANAL, but I would highly suggest talking to one asap, because depending on the state, there may or may not be different things you have to do. In my case we had to get him to redo the POA and then send a copy to a lwayer in Texas (It helps when your uncle is a DA too)
My initial guess would be that any contract signed while not legally capable of doing so would void the contract, but they may be able to make it stick. In our case, we had my grandfather declared mentally incapable by two doctors and he cannot make any financial decisions, I truly feel for you in this time of need, and hope that everything works out for you. My guess would be the bank would be liable for the value of the loan if it KNEW and contributed to her taking out a loan.
posted: Feb. 26, 2008 @ 9:02p
When someone grants a POA, that person still has authority to enter into contracts and make decisions for themselves, assuming legal capacity. They can also revoke the POA at any time. I believe you are confusing POA with guardianshp.
Senior Member - 1K
posted: Feb. 26, 2008 @ 9:41p
According to the power of attorney documents that were filed and entered by the courts, she can not legally enter into a contract. The judge at the hearing asked her and her family if they had been advised as to what they were signing over? and then he went on to describe all the things she would no longer be able to do on her own. One of the things the judge mention was never being able to buy a car or sign hospitals documents or even applying for credit cards.It's also irrevocable except by a court order. It was all done to protect her and her assets from her sister, who had previously tried to get power of attorney with a forged signature. I also have guardianship, but no where in the paperwork I was reading does it go into the details like the power of attorney documents do. It has more to do with her welfare and health and care. The power of attorney documents are very detailed on all legal matters but being on the paper and putting them to the test are two different things. My biggest fear in the whole thing is that it will ruin her finance's. Just before I got POA, she racked up close to 80K in credit card debt buying lottery tickets and making donations to phone solicitors. I have worked with the cards and have had her on a fantastic repayment plan but that is all relying on her maintaining good credit. If her credit takes a nose dive then her creditors will automatically raise the rates, one card already has because of the late payments on the above mentioned two loans. If the others start to raise their rates, then she will not be able to afford the payments and I will have to file bankruptcy on her. That would then bring up all kinds of other problems in regards to hospital care and other medical services.
I will say this. It is deffenitly a learning experience.
Senior Member - 2K
posted: Feb. 26, 2008 @ 10:43p
This is incredible. Any way to find that nephew and repossess the truck? I would also find that kid and put the squeeze on both of them. They deserve a good skull cracking for taking advantage of an incapacitated senior citizen.
As to your particulars, I would suspend conversing with the bank and ask your attorney's secretary for either another lawyer in the office to take over temporarily or a referral to another lawyer in the interim. Good luck and good job.
Senior Member - 1K
posted: Feb. 27, 2008 @ 10:17a
vaylon said: I have worked with the cards and have had her on a fantastic repayment plan but that is all relying on her maintaining good credit. If her credit takes a nose dive then her creditors will automatically raise the rates, one card already has because of the late payments on the above mentioned two loans. If the others start to raise their rates, then she will not be able to afford the payments and I will have to file bankruptcy on her. I would suggest calling the CC company that has already raised her rates, explain the situation as you have here; there's a chance that a reasonable person on their end could see the situation and at least temporarily revert back to the old rates so as not to cause further damage. I would speak to/write the CEO of that company if they will not relent. They would not like to hear this story on CNN or the local news.
Senior Member - 1K
posted: Feb. 27, 2008 @ 10:25a
If she has assets, why are you allowing her to carry credit card balances?
Pay off the balances, cancel all the accounts, put a freeze on her credit reports, and be done with it.
If you truly have power of attorney, you could...and should...do this.
Sounds like you need to sit down with a financial planner.
Senior Member - 1K
posted: Feb. 27, 2008 @ 12:25p
After contemplating all the options. I did a easy and dirty trick with the help of the collection agents. They promised to hold off on any further proceedings till we can find the truck. Since they can't issue the repo order without it affecting her credit, I have to get the truck. So, I just reported it stolen. When I explained everything to the state police I got a huge chuckle when the officer said they will love getting a hold of this deadbeat. So hopefully by the end of the day, they will have the truck. They already have his address.
Once the police have the truck, then I can use her funds to satisfy the account with the collections agent and go get the truck. Then I can turn around and sell the truck for much more than is owed on it. He did put a very large down payment on it to get it, almost 10K. Hopefully she will have a couple of extra thousand to pay on some of her debt's. In return for the help, the collection agency contacted the creditor and has made arraignments to remove the past dues on the account and show it as paid in full with no late payments.
As for the financial adviser? How do you think I got the responsibilities. Her last accountant and financial adviser drained very large sums from her over the years.
I am not doing any of this for profit or an ulterior motive. Many years ago she and her husband helped me get my life on track. Something I will always be in debt to them for. Besides, if I was to ignore the situation and not do all that I can do, it would screw with my Karma.
posted: Feb. 27, 2008 @ 12:36p
mybuds said: When someone grants a POA, that person still has authority to enter into contracts and make decisions for themselves, assuming legal capacity. They can also revoke the POA at any time. I believe you are confusing POA with guardianshp.Exactly. I have POA for my mom but she can still do everything. If you want to prevent this in the future, you might want to talk to the attorney about a Guardianship arrangement.
Another thing you can do right now is to write to all 3 credit reporting agency and put fraud alert (or it that a freeze?) on them.
posted: Feb. 27, 2008 @ 12:45p
First, I have to say that reporting the truck stolen and selling it to pocket the difference is quite ingenious and sounds immensely satisfying, given the situation.
Secondly, any bets that a thread will soon pop up?
DeadbeatNephew said: So, I recently had my aunt purchase a truck in her name due to some past credit problems. I've been making the payments for it, though I've been a little behind lately... Anyway, some bastard saying that he has "power of attorney" just reported the car as stolen (!!?) and is selling the truck without my permission, after I've paid a 10k down payment plus thousands in monthly payments! What's the best way to sue this fool?
Senior Member - 1K
posted: Feb. 29, 2008 @ 8:50a
Just an update.
The truck is sitting in her garage. The police caught him yesterday evening but it got much worse for him. They pulled him over for the stolen truck and when he had no proof of insurance and that it was his truck, they cuffed him and put him in the squad car. Then they searched the truck! found two unlicensed handguns, a crack pipe, a little over 2 grams of crack, 6 oz of pot and a full prescription bottle of oxicodone. The prescription was reported as stolen and was still in the original owners pill bottle. The charge of auto theft is going to be dropped but he doesn't know it yet. The sheriff thinks it will be better for everyone involved if it appears as if he just got pulled over for a traffic violation. That way his family doesn't blame me or the aunt for getting him thrown in the pokey for a few years. I do feel bad for the guy, not because of what I did but because he had more problems than anyone was aware of. He has basically ruined his young life for a high. My attorney did call me and although his advice was a day late and a dollar short he did say my solution was "inventive". and he reassured me about the power of attorney.
So for clarification to all here is a quick breakdown and remember every state has different laws regarding this matter, so check with your state. A POA can be as general or as precise as you want. A general POA gives you the ability to make decisions for someone in case they can't but it can be revoked at anytime and does not carry much legal weight. But a precise drawn out POA describing all situations carries a lot of legal weight. For example, If you sign over POA to your eldest child in the event of sickness or injury. Then when you get sick, they have some of the legal abilities to make judgments and sign documents on your behalf. Its implied that the child will do and make judgments in your best interest. Any other actions could be construed as illegal. But, like my POA has wording describing all situations where she gave me complete POA over everything in her life and it also gives the reasons she has turned over complete control. One of those reasons was her inability to make sound and cohesive financial decisions. The other was her childlike inability to say "no". It also goes into all kinds of details about sickness and death. In this case the POA specifically states that she does not have the abilities nor the proper reasoning skills to enter into a legal contract. Which was mine and her's number one reason for getting the POA in the first place. So that situations like this couldn't happen. So that no one could take advantage of her kindness or as the POA calls it "her diminishing mental capacity".
As for her finances? This is how she looks at them. She is 74 years old. The oldest person in her entire family lived to 77. 90% pass away in their 60's. She feels she is living on borrowed time. She has already given the kids their inheritance in lump cash sums and made them sign documents that they would not seek anymore from her or the estate. The rest will go completely to human rights organizations and animal shelters just prior to her death. As for the Banks? Something happened many years ago that she still holds a massive grudge against certain financial institutions. Her intention is to leave them fighting each over for whatever is left of her estate, which won't be much. It's odd, but it's one thing she is stringent about.
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