ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Monday, March 31, 1997 TAG: 9704010006
SECTION: MONEY PAGE: 6 EDITION: METRO
COLUMN: MONEY MATTERS
SOURCE: MAG POFF
Q: I am interested in challenging a power of attorney that my father gave to my brother. Is the right of an interested party to challenge actions by a person holding a power of attorney retroactive or can it be utilized to question prior actions?
A: W. William Gust, an estate and tax lawyer with the Roanoke firm of Gentry, Locke, Rakes and Moore, said you can seek an accounting from a person holding a power of attorney for his actions during the prior two years. The law covers the two years leading up to the date on which you file a motion in a circuit court asking for such an accounting.
The motion can be filed by an interested person in a situation in which someone (such as your brother) acts under a power of attorney for a person (such as your father) who is unable to attend to his or her own affairs.
An interested person who can seek such an accounting includes a spouse, parent, brother, sister, child or other lineal descendant or spouse of a child of the person who granted the power of attorney.
The court would have the authority to terminate the power of attorney if that proves to be in the best interest of the person who granted it.
The advantage of proceeding under this law is that you do not have to allege fraud or even mismanagement. You do not have to prove anything. Your motion merely brings the attorney-in-fact before the court to show how he or she has handled his position of trust.
Gust said it would be difficult to bring a suit for actions more than two years in the past. In such a case, you would have to prove that you were an indirect beneficiary of the estate of the person who granted the power of attorney.
Furthermore, you would have to file a formal court case in which you would be required to allege fraud or mismanagement of the estate. The burden would be on you to prove that your allegations are true.
Investment clubs
Q: Is there an investment club in this area? If not, where is the closest one?
A: Several investment clubs operate in this area, but they are not usually easy to find or open to everyone.
Investment clubs are usually formed by people of similar interests who already know each other. They are composed of social friends who decide to invest together because they share the same investment philosophy.
There is a national organization and a state chapter of people interested in investment clubs. Neither is willing to match people with existing clubs, however. That's because the Securities and Exchange Commission considers investment clubs to be small mutual funds and matching investors with funds without issuing a prospectus is a violation of the law. A prospectus is a complex and legal document that explains a investment organization's operations and philosophy and generally gives prospective investors a sense of the level of risk.
The organizations are also concerned about the potential legal liability involved if such match-making went sour.
You may hook up to an existing club through some of your business or social contacts. More likely, you will have to start your own investment club among your acquaintances.
The Central Virginia Council of the National Association of Investors in Richmond operates investment courses and similar activities in that city. You might like to attend some of their events. You can hear a recording about the council's latest activities and leave your name by calling (804) 756-8084.
You can also get helpful materials from the National Association of Investors Corp., 711 W. 13-Mile Road, Madison Heights, Mich. 48071. You can call the organization at (810) 583-6242.
Investment clubs can help their members learn about investing in the market. Their methods teach you how to study a company for possible investment. By pooling your money with others, you can diversify and spread your risk.
But club members may disagree on investment philosophy, and many clubs break up each . You must also keep careful records of stock performance and the amount invested by each member.
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