Many times I am asked to prepare a deed from a loved one to a child, when only the child is in my office. In other words, the beneficiary of the gift is asking me to prepare the documentation for the gift. Typically, the beneficiary will have several reasons: we want to avoid probate; we want to protect it from the nursing home; my father always wanted me to have this.
There are many right ways to do this and there are many wrong ways to do it. One such “wrong way” was brought to the attention of the Tennessee Court of Appeals. In the case, the court found that the person appointed under the power of attorney, violated his fiduciary responsibility, when he deeded property to himself. The court assessed damages at over $900,000!
The lesson to be learned here is that when a power of attorney is prepared, it needs to be prepared by an attorney who represents the person making the power of attorney. It needs to be made at a time when the person granting the power of attorney is cognizant of what he or she is doing and that the issue of gifting and who to gift to is adamantly discussed and covered in the discussion and in the document itself.
People who are appointed as agents under a power of attorney need to understand their role is as a fiduciary – the highest standard imposed under Kansas law. Self dealing or self profiting may subject you to civil, if not criminal, liability.