Estate planning requires a high level of trust between the owner of the estate and those chosen to take responsibility for an individual's financial matters. Whether those involved in handling the estate are building a trust or handling investments, they may sometimes have access to the estate's assets and are expected to operate ethically and transparently. For one man and his heirs, however, a trusted money manager stole heavily from the estate, using his access to the estate to misappropriate more than $1million before being caught and imprisoned.
The 44-year-old licensed stockbroker and investment manager may have been stealing money from his client for seven years before being discovered. He began as an investment advisor for his elderly client and was later made trustee of the client's revocable living trust. During the course of his duties, he was granted powers of attorney, allowing him to act on his client's behalf.
Unfortunately, he used the access granted to him by his client to illegitimately transfer hundreds of thousands of dollars of funds to himself.
After the client's death in 2006, the broker fraudulently transferred nearly a quarter of a million additional dollars. Because of the thefts, little of the estate remained for collection by the heirs. At his sentencing hearing, the investment manager admitted that he stole from his client and he was sentenced to five years in prison.
Estate planning is an important part of the management of your finances. Part of that planning may require a power of attorney. It is important that residents of Michigan research precisely what powers are being granted by such a document so that they are fully aware of the possible problems that can arise from unethical behaviors. Residents should also be aware of their rights to use the state's court system to pursue legal action against anyone who abuses the powers granted by such a document.
Source: Port Orchard Independent, "Lakewood stockbroker sentenced to prison | U.S. District Court," Dec. 30, 2012