Misusing Someone’s POA, Is That Fraud or Elder Abuse?
A power of attorney (POA) is a written document by a "principal" (also known as a "grantor") that gives someone else (the "agent") the legal authority to act for the principal. This designation is for financial purposes, such as opening a bank account, writing checks, implementing new investments and conducting financial transactions.
When the agent is misusing that power of attorney, there may be many types of legal claims that can be made against them.
When the agent is misusing that power of attorney, there may be many types of legal claims that can be made against them.
Power of Attorney
A power of attorney can give someone the authority to sell another person’s real property, open a lawsuit on his or her behalf and receive certain forms of income on behalf of the principal. This legal authority can be an important planning mechanism that allows someone to make financial decisions and conduct financial transactions in the event that the principal cannot do so for himself or herself whether temporarily or permanently.Types of Power of Attorney Abuse Cases
A power of attorney in the wrong hands can result in a financial predator stealing money, transferring assets or taking other adverse action against the principal. A power of attorney can bypass safeguards that financial institutions implement to protect their customers.In some situations, a person may suffer some type of health crisis and may choose to appoint a power of attorney while in a hospital because of the logistical difficulties of handling financial transactions in this situation. However, this is a prime time for predators who may take advantage of the opportunity and withdraw funds and close accounts. A power of attorney abuser may transfer real estate to his or her own name, remove the principal’s belongings, use the power of attorney’s money for his or her own gain or take advantage of the position in other ways.
Legal Claims
There may be a number of legal claims that can arise in this context. It is often important for the individual to act quickly in order to preserve his or her rights and mitigate the potential financial consequences. Some of the legal claims that may exist when a power of attorney is being abused include the following:Breach of Fiduciary Duty
A power of attorney designation creates a fiduciary relationship between the principal and the agent. In these situations, the agent owes the principal a duty to act with the utmost care and diligence. He or she owes loyalty to the principal and must act in the principal’s best interests, not his or her own. State law may establish the various duties that the agent owes to the principal, possibly including the right to keep the principal informed of financial information that may affect him or her, notification of any self-dealing or depriving a personal benefit from transactions and prohibitions against self-dealing in the principal’s property. If the agent violates these duties, the principal may be able to file a lawsuit based on the breach of fiduciary duty.Conversion
Another possible legal claim is conversion. This claim basically asserts that the agent has stolen from the principal. Successfully litigating this type of case typically requires showing that the agent used the principal’s property in a manner inconsistent with his or her rights of ownership. Additionally, the principal may have the duty to demand the return of his or her property and that the agent refused to return it.Fraud
In some cases, the legal claim may be that the agent lied about circumstances which caused him or her to take action or have the agent take action on his or her behalf that was adverse to his or her interests.Elder Abuse
Several states have laws related to elder abuse. In some cases, the state includes taking financial advantage of a vulnerable elder in the statute. These may be criminal or civil laws with varying degrees of penalties, sometimes resulting in the possibility of charging a felony against the abuser.Damages
The amount of compensation that a principal may be able to receive depends on a number of factors, such as the value of the property stolen, the agent’s conduct and state law.Legal Assistance
Individuals who believe that their power of attorney is being abused or who are concerned about a loved one may wish to discuss their case with a lawyer. A lawyer may be able to revoke the power of attorney so that no further damage is done. He or she may be able to demand the return of stolen assets or money and file a lawsuit that alleges the appropriate cause of action against the abuser.Read more on this legal issue
What Is a Durable Power of Attorney?
What Is a Power of Attorney and Healthcare Proxy?
What Are the Rules Governing Helpers Receiving Money or Gifts from Their Elderly Patients/Clients?
Undue Influence – When Is a Will or Power of Attorney Considered "Unduly Influenced"?
Can the Hospital Authorize Treatment Without My Consent when I Am My Husband’s POA for Healthcare?
Creating a Power of Attorney at the Right Time
Power of Attorney Fraud & Abuse by Non-Family Member
Guardianships - Common Legal Issues
What Is a Durable Power of Attorney?
What Is a Power of Attorney and Healthcare Proxy?
What Are the Rules Governing Helpers Receiving Money or Gifts from Their Elderly Patients/Clients?
Undue Influence – When Is a Will or Power of Attorney Considered "Unduly Influenced"?
Can the Hospital Authorize Treatment Without My Consent when I Am My Husband’s POA for Healthcare?
Creating a Power of Attorney at the Right Time
Power of Attorney Fraud & Abuse by Non-Family Member
Guardianships - Common Legal Issues
Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws and.how they may affect a case.
