Power of Attorney Abuse Mostly Targets Women

The power of attorney for healthcare and financial decisions might be one of the most important documents we sign in our lives. Because it's often very broad, it carries the risk of abuse. Attorney Hilda Winnebeck talks about how this happens, and how we can best protect ourselves.

We hear it all the time: a will, a living will, and a power of attorney are the three must-haves for handling the end of life and everything after. But in a talk to the Senior Professionals working group of the Fondsfrauen, Hilda Winnebeck explained that a power of attorney can also put someone in serious danger, when it's abused. Hilda Winnebeck is a lawyer and founder of theInitiative gegen Vollmachtmissbrauch e.V.(Initiative Against Power of Attorney Abuse). We spoke with her about this topic.

Hilda, why should Fondsfrauen in particular pay attention to power of attorney abuse?

Fondsfrauen work in the finance sector and are often financially well-off. That makes them attractive targets. Women are the main victims of power of attorney abuse overall, because they're usually the ones "left behind" in a partnership.

What does a power of attorney usually cover? What makes it so significant?

The tricky thing about a power of attorney is that people usually don't grasp how far-reaching it is at the moment they sign it. That's why signing one can be the most important signature you ever make. A power of attorney is usually very broad. It can cover banking, real estate, securities accounts, health decisions, where you live, and representation before government offices and courts.

How do the perpetrators operate?

They look for wealth and wait for the right moment, or the right life situation, to take control.

And how does power of attorney abuse actually work? What do the perpetrators do?

At first, the perpetrators do good: they help someone who needs help. But bit by bit, they gain control over the person, then control over their assets.

This happens in four steps:

• DOING GOOD Helping; building trust; making themselves indispensable
• DOING HARM Sowing doubt; splitting up the family
• REMOVING Isolating, controlling communication, restricting mobility, sedation, placing in a care home
• CASHING IN Selling off assets bit by bit, purchases and luxury spending, construction projects, etc.

Why is it fairly easy for perpetrators to abuse a power of attorney?

The perpetrators can pose as caring helpers, because at first they really do help the person who needs it. But through helping, they also get a look into that person's assets and surroundings. The person's weakness and the perpetrator's knowledge of their circumstances make it easier to take control of communication and information. And once all contact with people who could help the victim is cut off, they sell off the assets step by step. The risk of getting caught is fairly low, because the power of attorney also lets them block outside oversight. It's practically built-in protection from prosecution.

Is power of attorney abuse the same as inheritance hunting?

No. With inheritance hunting, the person dies first, then the assets fall into the hands of the inheritance hunter. Until then, the person lives mostly undisturbed. With power of attorney abuse, the person usually loses their freedom first, then their assets, while they're still alive. By the time they realize they've been cheated, it's often too late. They're isolated and trapped. They lose not just their assets, but also their independence, contact with family and friends, sometimes their home, and sometimes their health and freedom too.

That sounds awful. Are these rare, isolated cases, or does this happen often?

The number of unreported cases is fairly high, because people around the victim, like banks and others, often go along with it. I don't want to scare people, just point out that a power of attorney doesn't automatically mean everything is fine. Our "Initiative gegen Vollmachtmissbrauch e.V." naturally hears about a lot of cases, since people bring them to us.

Most power of attorney abuse happens unnoticed, hidden from view. But there are also well-known cases that made the news. One is the case of the famous athlete and manager Rudi Assauer. Another is the Bettencourt affair, where several people close to L'Oréal heiress Liliane Bettencourt enriched themselves from her fortune. The photographer François-Marie Banier, a close friend of the elderly woman, is said to have received gifts worth a billion euros.

Doesn't anyone notice something's wrong?

The perpetrators have helpers. These can be doctors, banks, wealth managers, and others, who in the Bettencourt case were convicted along with the main perpetrator. If one of these people won't cooperate, the perpetrator can just switch, since they hold the power of attorney and full control. If a doctor won't prescribe the "right" medication, for example, the perpetrator takes the victim to a different doctor. The use of sedatives often plays a big role too, when someone needs to be made "manageable" for signing documents. If a bank or wealth manager gets suspicious and threatens not to cooperate, they're told the account could be moved elsewhere. The power of attorney holder can control everything, and the victims are usually wealthy enough that the bank or wealth manager wants to keep the business relationship going. Notaries also often end up helping the perpetrators, notarizing general powers of attorney even when the person granting it is no longer legally capable of understanding what they're signing. After all, a notary also has a financial interest in completing the transaction.

And why don't prosecutors and courts act on these cases?

It's easier for them to assume the older person is "taken care of," and at first glance, they are. The person holding power of attorney appears to be looking after them.

When legal investigations happen at all, they're often weak, because the victims are usually old and frail. So nobody really digs deeper, or cases that do start get dropped again soon. Time is also a factor: the abuse often moves faster than court proceedings can conclude. And in the end, it's hard to prove what the person granting power of attorney actually wanted. When family members want to hire a lawyer, lawyers often turn down these cases, because they're difficult, complex, time-consuming, and unlikely to succeed.

Can appointing a court-supervised guardian protect against abuse?

Sort of. The system has a flaw here. First, it takes too long and the requirements are too high before a supervisory guardian gets appointed.

The guardian is supposed to check whether the person holding power of attorney is acting properly, and revoke it if not. But once they do that, they lose the job. So we often hear that supervisory guardians have little interest in checking things thoroughly. The better they get along with the person they're supposed to be checking, the easier and more profitable the job is. And we keep seeing guardians who dip into their wards' accounts themselves. The courts that appointed these guardians then have to admit they put the fox in charge of the henhouse. It's a tough problem.

How else can we protect ourselves from power of attorney abuse? Or is it better not to grant one at all?

No, a power of attorney is an extremely important document. It should still be set up, just done right. That means:

• Four-eyes principle: Multiple people holding power of attorney; joint decisions
• Transparency: Keep the family informed, no secrets
• Control: Regular accounting of assets and spending
• Documentation: Keep decisions traceable
• Register the power of attorney

These things are standard practice in companies, and they should apply to personal wealth too.

Thank you for these insights, even though it's a pretty sad topic.

Foto: Hilda Winnebeck

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