Recently, I read an article that gave the impression that very few people could go to court to ask for an accounting from a person with Power of Attorney for Finances (POA) authority. This is not true. Wisconsin law provides that relatives, guardians and beneficiaries can check up on a person with POA authority.
Although you sometimes hear a person with Power of Attorney authority called “the POA,” in legal terms, the person with authority is technically the “agent,” and the person giving authority is the “principal.”
Of course, the agent can reimburse himself or herself for reasonable expenses connected with executing his duties on behalf of the principal. But if the agent uses funds for his or her own benefit, the easiest path is to have the principal replace the agent. The principal gives authority and the principal can take it away. After that, legal action can be considered.
But what if the principal (Grandma) is not competent? Wisconsin Statutes allow the following parties to have a court review the agent’s performance or review the POA document itself:
(a) The principal or the agent.
(b) A guardian, conservator, or other fiduciary acting for the principal.
(c) A person authorized to make health-care decisions for the principal.
(d) The principal's spouse, parent, or descendant.
(e) The principal's domestic partner.
(f) An individual who would qualify as a presumptive heir of the principal.
(g) A person named as a beneficiary to receive any property, benefit, or contractual right on the principal's death or as a beneficiary of a trust created by or for the principal that has a financial interest in the principal's estate.
(h) A governmental agency having regulatory authority to protect the welfare of the principal.
(i) The principal's caregiver or another person that demonstrates sufficient interest in the principal's welfare.
(j) A person asked to accept the power of attorney. (See Chapter 244 – WI Statutes.)
As you can see, lots of interested parties are able to keep an eye on things. The problem is legal action costs time and money, and by the time you land in court, the damage may be done with no funds left to recover.
Obviously the takeaway here is to select an agent with sterling qualities, but here’s one more tip: I recommend customizing the Power of Attorney for Finances document to explicitly require a monthly or quarterly written accounting of expenditures. This report can be provided to the principal or the principal’s guardian. This is good for both the parties because it can prevent misunderstandings. Many principals are still competent while the POA is in effect, and this extra step has the added benefit of giving principals reassurance that they are still in control.