My sister and I are now in the position of questioning our brother who is POA and allegedly has no money to buy a house and wants to use our father's money to do so. This has to be illegal, am I right?
I agree with MJ, 100%. As long as the "owner" of what is to be inherited is still living - there is literally no inheritance (in the absence of some kind of trust). POA (or anyone else) cannot lay claim to anything that has not been given to them directly by their loved one as a gift in the present day. Everything that the loved one owns belongs to them and is intended for their care. It is the entire reason that the "lookback" period exists.
When there is a bigger sum involved, all too often people get caught up in getting their share or using their "inheritance" early but the reality is that it doesn't belong to them. And it may not ever belong to them. It only becomes their's once the person it belongs to no longer has any need for and and can no longer ever possibly have any need for it.
What will your brother do if suddenly the bottom falls out on whatever substantial savings your mother has? You and your family are the ones actually providing her physical care. What happens if she needs more care than you can physically provide and you have no choice but to move her to a care facility and that expense drains her funds?
It isn't you or your sister who will be on the hook to cover her gap funds if she runs out of money. It will be your brother - the POA who illegally benefited from her money in the course of executing his duties as POA, who will have to suddenly find that money he spent buying houses for himself and his ex-wife to contribute to her care for god only knows how long to make up for all of the "inheritance" he took early that wasn't his in the first place.
That being said, as others have mentioned - YOU also have to go about this the right way. He has no direct responsibility to answer to you as the POA with regards to how he is managing your father's finances. But if you KNOW that he is mismanaging his responsibilities AND misappropriating your father's funds - then getting an elder law attorney involved is the best course of action.
Yeah, no, he can't do that. He doesn't seem to understand his responsibilities as POA and shouldn't hold it if he's that clueless.
I was my mom's POA, and my brother (a good guy) came to me at one point asking for an advance on his inheritance in order to buy his ex-wife out of their house. I said no, because even though my mom could have afforded it, her money's job was to work for her while she was alive. It was her principle, and the investment of that money gave her the income she needed to pay her bills. Less money in the investments = less return on those investments.
Point out to your brother that even if there's "enough" money sitting around, it still should be working for your mother, not for him.
I am not certain I fully understand your situation: more information might help me. But as I gather the situation your brother, who is POA, wants to buy a home, and wants to use his father's money to do so.
That can't be done in any circumstances as it would be both "gifting" by the father who is no longer competent to do so (or IS he) and it would be a POA enriching himself, one of the basic forbidden tenets of serving as a POA.
I would see an elder law attorney with your questions and I wish you the best.
As to questioning a POA about "what did you do with Dad's money", the POA is under no obligation to tell you that, but the COURTS can, in fact, ask for explanations and records of the POA if you suspect fraud by the brother, and can bring a case for fraud against him. This again falls under the purview of seeing an attorney.
Yes , you would be right in this assumption. My father is no longer sound of mind to agree to “ gifting” any money to POA. My brother spoke to my sister about using what would be his share of fathers estate once he passes. She told him that he can’t do that, as well as being illegal, we have no guarantee that he would pay it back. He didn’t want to ask me, why I don’t know. But my sister and I mended the rift between us, since last time I posted on here. I would like to see her taken care of. I’m not so much worried about my inheritance except it would be nice to leave my husband and stepchildren something when I pass. But I feel my brother does not want me to have that choice.
When Medicaid may be needed in the future, you cannot gift money even if IRS allows it and I think thats 15k a year to divert being taxed . If Medicaid is needed within the 5 years the gift was made, there will be penalties. Buying a house with Dads money with brother holding the deed is a very large gift. And as POA he can't profit from being POA unless its in the POA. Ex: he is allowed payment for hours put in as POA.
That's called stealing - unless your Dad willingly gifts the money to your POA brother. It's allowed to gift money to one child, even if another child is unhappy about it. But your Dad would need to be mentally competent to be able to give the money as a gift to his son. Be careful also of gift tax. Your Dad has dementia, but depending on how severe his dementia is, he might still be mentally competent.
The financial authority of some PoAs can include purchasing real estate and making investments on behalf of the LO, but it needs to benefit the LO. I’m not an elder law attorney and unless you’ve seen the actual PoA doc and know the reason for him spending this money, you will need to bring evidence of the financial abuse to an elder law attorney to see if you have a case,
My brother will not be buying a house or anything for my father who is living in our home under our care. At least we can be thankful for that. We sold both of Dad’s properties, one of which was a weekender. My brother didn’t want me living in it once Dad passed, even though it was my fathers wish for me to do so when he bought the house, as at the time I was not in a relationship. But no, and once my father started to deteriorate through dementia and unable to make sound decisions, the decision was made for him. That my brother appointed himself enduring POA and took control of all the finances and of me. Thank goodness I met my husband who is my total support and love, and without him I would be lost. I can’t imagine what hold my SIL has over my brother, if this is the case, for him to breach his POA privileges. The aunt of my sisters best friend, long ago read my sisters future. I don’t hold much faith in clairvoyance and such like, but the woman in question had a solid reputation for accuracy in her visions. She told my sister that our brother and his wife would try to steal our inheritance. As I said, I took this with an ambivalence at the time, but now in light of what has occurred, I am inclined to believe it, as does my sister. Anyway, I’m sorry for venting. But I feel sometimes talking to strangers is better. I’m hopeful however, but not confident that this will pass without a war.
Simple answer. Yes, not legal. How do you know brother wants to buy a house with father's money (presumably for himself, not the dad)? Many POA documents are written to include the ability for the POA to conduct real estate transactions, but it must be on behalf of or for the benefit of the principal. For example, the POA might need to sell the person's real estate to pay for their care, or the POA might use the person's money to pay for buy-in to a continuing care retirement company for them.
Newbiewife . This is how it is. My father doesn’t need a house. He sold both his primary house and weekender when he came into our care. Again decided by POA. Father is living with my husband and me under 24/7 care. He has dementia and wouldn’t know if the sky fell in. POA already bought his ex wife a house for God knows what reason with our fathers money, but he has paid it back or so he says. I fail to see why he didn’t just let the b…. keep the house they bought and and buy something for himself out of the sale of his two other houses that he since sold. POA is greedy and self serving, and makes more money in a year than my sister and I would make in a lifetime. Whatever care our father needs is sufficiently taken care of. POA WOULD’NT VISIT TWICE A YEAR UNLESS HE WANTED SOMETHING. This is how I know, ok?
When there is a bigger sum involved, all too often people get caught up in getting their share or using their "inheritance" early but the reality is that it doesn't belong to them. And it may not ever belong to them. It only becomes their's once the person it belongs to no longer has any need for and and can no longer ever possibly have any need for it.
What will your brother do if suddenly the bottom falls out on whatever substantial savings your mother has? You and your family are the ones actually providing her physical care. What happens if she needs more care than you can physically provide and you have no choice but to move her to a care facility and that expense drains her funds?
It isn't you or your sister who will be on the hook to cover her gap funds if she runs out of money. It will be your brother - the POA who illegally benefited from her money in the course of executing his duties as POA, who will have to suddenly find that money he spent buying houses for himself and his ex-wife to contribute to her care for god only knows how long to make up for all of the "inheritance" he took early that wasn't his in the first place.
That being said, as others have mentioned - YOU also have to go about this the right way. He has no direct responsibility to answer to you as the POA with regards to how he is managing your father's finances. But if you KNOW that he is mismanaging his responsibilities AND misappropriating your father's funds - then getting an elder law attorney involved is the best course of action.
I was my mom's POA, and my brother (a good guy) came to me at one point asking for an advance on his inheritance in order to buy his ex-wife out of their house. I said no, because even though my mom could have afforded it, her money's job was to work for her while she was alive. It was her principle, and the investment of that money gave her the income she needed to pay her bills. Less money in the investments = less return on those investments.
Point out to your brother that even if there's "enough" money sitting around, it still should be working for your mother, not for him.
That can't be done in any circumstances as it would be both "gifting" by the father who is no longer competent to do so (or IS he) and it would be a POA enriching himself, one of the basic forbidden tenets of serving as a POA.
I would see an elder law attorney with your questions and I wish you the best.
As to questioning a POA about "what did you do with Dad's money", the POA is under no obligation to tell you that, but the COURTS can, in fact, ask for explanations and records of the POA if you suspect fraud by the brother, and can bring a case for fraud against him. This again falls under the purview of seeing an attorney.
Wishing you the best.
I haven't seen one state that allows a POA to enrich themselves from the principles money, in fact, it says it is illegal to do so and is criminal.
But no, and once my father started to deteriorate through dementia and unable to make sound decisions, the decision was made for him. That my brother appointed himself enduring POA and took control of all the finances and of me. Thank goodness I met my husband who is my total support and love, and without him I would be lost. I can’t imagine what hold my SIL has over my brother, if this is the case, for him to breach his POA privileges. The aunt of my sisters best friend, long ago read my sisters future. I don’t hold much faith in clairvoyance and such like, but the woman in question had a solid reputation for accuracy in her visions. She told my sister that our brother and his wife would try to steal our inheritance. As I said, I took this with an ambivalence at the time, but now in light of what has occurred, I am inclined to believe it, as does my sister. Anyway, I’m sorry for venting. But I feel sometimes talking to strangers is better. I’m hopeful however, but not confident that this will pass without a war.