By: Terry Bennett
In a number of estates we sadly see where a loved one, who is usually a child, has been given a Power of Attorney and has depleted the probate estate through transfers to themselves. This is seems to often happen to physically incapacitated persons. What does the law have to say in such situations?
Generally speaking, a rebuttable presumption of fraud arises when a person makes transfers to himself from another’s property while standing in a confidential relationship to the grantor. This protects in some way the decedent’s estate from deprivations by third parties upon whom the decedent relied at the end of their life.
In Kentucky a Power of Attorney must specifically state that the attorney in fact can gift assets to themselves or it is illegal to do so. Even when the Power of Attorney allows the attorney in fact to gift to themselves, fraud can still be committed if the attorney in fact is taking advantage of the incapacitated individual.
Therefore, when making a Power of Attorney, it is important to decide whether to allow the attorney in fact to make gifts to themselves. Think carefully about whom you are naming as your attorney in fact. Does the person have money trouble, a gambling problem, or a drinking or drug problem? Such issues should be red flags. Consult carefully with your attorney about the ramifications of a power of attorney and be sure your power of attorney is tailored to your specific wishes. Powers of attorney are powerful documents with long lasting implications.
Related Post: Does a Bank Have to Accept my Power of Attorney?
Terry joined the practice in 1974. His areas of focus include personal injury law, real estate law, probate law, estate planning, business law, corporations, and adoptions. He is admitted to practice before the United States Supreme Court, United States Court of Appeals 6th Circuit, United States District Court Western District of Kentucky, United States Court of Military Appeals, and all Kentucky courts.
A Hardin County native and former Army office in the Judge Advocate General (JAG) Corps, Terry graduated from William and Mary in Virginia with an undergraduate degree in government. He received his Juris Doctorate from Wake Forest Law School in Winston Salem, North Carolina, where he graduated with honors.