When someone has power of attorney to handle another person’s financial or healthcare matters, they should act in that person’s best interests. But, sadly, sometimes people will choose to manipulate the other person or use their assets for their personal gain. When that happens, you need to know how to identify the misuse to ensure your loved ones and their interests remain protected.
If someone agrees to serve as a power of attorney or agent, they take on a fiduciary duty to the person they are helping. This duty requires them to act in the person’s best interests and keep accurate records of what they have done. Failure to do so is considered a breach of fiduciary duty.
People can have one of two types of power of attorney in place. Healthcare power of attorney permits someone to make healthcare decisions on your behalf. This power allows the agent to make decisions about life support, long-term care, and other medical care when the individual cannot make these decisions independently.
Financial power of attorney permits the agent to handle finances and assets on behalf of the other party. This means the individual has the right to access the other party’s financial accounts, pay their bills, and take care of their real estate or personal property. Unfortunately, either type of power of attorney has the potential for misuse.
If someone placed in charge of the finances of another party does not manage them well, either through negligence or because they are trying to gain something for themselves, is guilty of misusing the power of attorney privileges. In the legal world, this is called a breach of fiduciary duty.
Healthcare power of attorney can also be abused. Forcing an elderly loved one into a nursing home against their will for personal gain, for example, could fall into this category.
If you suspect that someone is abusing power of attorney, the guilty party faces civil and criminal penalties. The guilty agent can face a lawsuit and be forced to pay back what they took with interest. They can also face prosecution for fraud, embezzlement, exploitation, and theft, depending on what they endured due to their abuse.
If you are taking on the agent’s role in a power of attorney agreement, make sure you understand the implications. The potential penalties of abusing that power are intense, and you could end up with hefty fines and criminal charges if you face accusations of abuse.
The first step to protect against the abuse of power of attorney is choosing an agent carefully. If you are setting up power of attorney, make sure you choose someone you trust to take on that role. Not only should you trust them to keep your best interests in mind, but you should also trust them to keep good records. You also need to know that they are willing to make hard decisions on your behalf, even in potentially difficult times.
If you suspect someone is abusing their power of attorney over a loved one, then you may need to petition the court to get legal conservatorship of the person. This action will take away their right to act as power of attorney and stop the abuse. However, it can be challenging to do. First, you may need to prove that the other person has been an abusive agent. Then, you can demand records or show proof of the abuse to the courts, and working with an estate planning or elder law attorney is helpful. You should also report the abuse to the local adult protective services department in your county or state.
Power of attorney is a helpful tool to assist those who cannot take care of their financial or healthcare needs independently, but it can easily be abused. If you have a loved one who you suspect is the victim of power of attorney abuse, reach out to our law firm right away. We can help you petition the court for legal conservatorship to stop the abuse, and we can help you prosecute the guilty party to ensure that the abuse stops. In addition, if you are preparing your estate planning documents, our team can help you set up power of attorney and advise choosing the right individual for this critical role.