Making Sense of Power of Attorney Abuse

Power of Attorney Explained

Principals grant agents the power of attorney to act on their behalf. The terms set forth in their POA documents further memorialize the fiduciary relationship between the two parties.

Agents regularly use a POA to open bank accounts, pay bills, invest assets, sell real property or direct other financial transactions for a testator’s estate.

But it's when agents abuse or misuse their power of attorney authority, that heirs hire estate dispute lawyers to seek injunctions to have them removed.

Powers of Attorney Genres

Probate litigators generally contest two types of power of attorney.

Nondurable Power of Attorney—expires when the principal dies, revokes it or becomes mentally incapacitated, causing the agent to lose his authority.

Durable Power of Attorney—likewise expires when the principal dies; however, the agent continues to hold POA authority over the principal in the event he becomes mentally incompetent.

In estate law, most probate disputes assert the agent abused a durable power of attorney.

Power of Attorney and Fiduciary Responsibility

The law places on agents the highest duties of care and trust to act loyal and in good faith on behalf of the principal.

This means agents must exercise reasonable care and skill when applying POA authority, and they must always place the principal’s needs and interests before their own.

Power of Attorney Abuse

Power of attorney abuse arises when agents breach their fiduciary duties owed to the principal.

The agent’s breach of duty further prompts heirs and beneficiaries to enter objections during probate proceedings, claiming one or more of the following power of attorney abuses took place:

Breach of Fiduciary Duty—failure to perform with the utmost care, diligence and loyalty when acting on behalf of the principal of which actually and proximately caused a reduction or elimination in a claimant’s inheritance.

Embezzlement—a conversion or misappropriation of estate property placed in an agent’s trust with intent to relieve the claimant of ownership.

Undue Influence—coercing, pressuring or persuading a principal into granting an agent power of attorney of which the principal would not have done had the agent’s influence not been present.

Fraud—conduct that misleads principals into granting agents a power of attorney.

Exceeding Power of Attorney Authority—overstepping the express and implied terms set forth in the power of attorney document.

Unfit or Incapacitated Agency—not possessing the skill or mental capacity to act in the best interest of the principal.

Agent Removal and Subsequent Power of Attorney Abuse Remedies

The courts will order agents removed from a power of attorney position when claimants demonstrate by preponderance of the evidence that the defendant abused his authority.

Agents who breach their fiduciary duties are further personally liable to compensate heirs and beneficiaries for losses sustained in estate property or assets.

To establish their case and win favorable judgments, claimants must hire a skilled estate dispute litigator to depose witnesses, gather expert testimony, order formal accountings, and subpoena documents.

The defendant may further face criminal liability if he broke the law while committing the wrongdoing.

Claimants must pay their estate dispute the attorney to litigate agent removal proceedings; but if the plaintiff prevails, the courts may order the estate to reimburse the claimant’s legal fees and expenses.