If I Purchase a truck from my father, ($4500.00), who has dementia and gave me his power of attorney years ago, how do I make payments of 15...

Question

If I Purchase a truck from my father, ($4500.00), who has dementia and gave me his power of attorney years ago, how do I make payments of 150.00 per month to make sure that I do not run into legal issues with other siblings. Do I open an account and make payments to it and do I make the payments payable to my father.

Answer

Many powers of attorney contain express language that prohibit self-dealing. SO you may not legally be able to do it (ask the attorney who wrote it). Even if you can, you have a fiduciary duty and can be sued for not meeting that duty. That would mean the purchase price needs to be fair market value and you must pay market rate interest, and the money must be used for him.

And even if you meet all those tests, you don't want to act if the siblings object as the legal fees to defend the lawsuit against you will be many times more than the $4500.

Before you do anything, see a lawyer to review the power of attorney and draft the sale document. That may cost a few dollars, but defending the lawsuit will cost you a fortune.

Answer

I have to agree with Attorney Ashman. You will have to review the power of attorney as it may prohibit self-dealing. Assuming it does not, the sale has to be for fair market value of the car. You can get this from a dealer, who can appraise the vehicle, or online from Kelley Blue Book, Edmund's or the NADA Guide. Keep or print the documentation showing what the car was worth.

The money is paid to your father, but if you are the power of attorney, then you will put it into his account. You do not need to create a separate account. You should see a lawyer for review of the power of attorney as it will be well worth the price of avoiding future litigation. He should also draft a bill of sale. If you are not paying outright for the car, then he ought to keep a lien on the title as security for the payment.

You absolutely MUST keep records and account for every penny of the purchase price and be able prove, via documents, that the money was given to your father and used for his benefit. You also probably ought to make your proposal to the siblings and get them to sign a family agreement indicating this is ok.