Debt: Don’t be Liable
The term Power of Attorney (POA) is often used to refer to the capacity of “attorney-in-fact” which allows one person to act as an “agent” for another person. Unfortunately, a power of attorney ends when the person granting the power to another becomes incapacitated. In order to allow the person to continue acting on your behalf you need to grant a “Durable power of Attorney” which is often what one means when they refer to a POA.
What effect does acting as a Power of Attorney (POA) have on your credit credit history? Will disclosing your information make you liable for another’s debts? Can you be held liable for misuse of the POA? What precautions should you take? In this post, certified public accountant Sally Herigstad answers a reader’s question about a brother who misused an aging mother’s credit card. Tim McMahon~ editor
I’ve been reading your elder abuse and credit card stories. This happened in our family. My brother and I caught it in time for our mother to have enough money left to live in assisted living for her final years.
Her baby son (age 50) charged over $12,000 on three of her credit cards. The money is still due. My other brother and I have power of attorney for our mother and the accounts are closed. We are also preparing a small claims suit against our younger brother to document his debt.
I have been able to access these accounts online except one, but I am concerned about giving my name, address and so on to the credit card companies. We recognize the estate must pay the bills after our mom dies, but I am afraid of damaging my credit and being held liable for the debts. Without getting a lawyer at this point, would giving the companies my information and power of attorney make me responsible personally? — Patrice
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Image courtesy of Simon Howden