October 28th, 2022 in Trusts
A power of attorney is a document allowing one person to make financial decisions for someone else who is unable to manage their own finances due to age, frail health or incapacity. A Power of Attorney allows a significant amount of control over the finances of an elderly individual. Because of the wide range of control over finances the power of attorney allows, there is also the potential for significant abuse to occur.
Power of attorney abuse does occur. It is most likely targeted at the elderly who are unable to defend themselves due to their frail health (mental and/or physical). The power of attorney document generally provides a wide range of authority to access funds, make financial decisions and control over personal and real property. Power of attorney abuse occurs when the agent steals funds while claiming it is for the benefit of the elder.
The power of attorney imposes a duty on the agent. Those duties, in part, include the following:
- The agent must keep the elder informed of things that affect his or her interest;
- The agent can only make a profit only if he or she obtains consent from the elder;
- The agent cannot take an adverse position to the elder;
- The agent cannot make a secret profit;
- The agent cannot transfer the elder’s property to himself or herself.
If the agent violates his duties, the agent is responsible for damages for the breach of fiduciary duties. The suit would be based on financial elder abuse. If the agent uses their authority to use the elder’s funds for their personal benefit, the agent can be guilty of conversion and power of attorney abuse.
There can be some telltale signs that indicate elder financial abuse is occurring. The following actions can indicate financial abuse either is occurring or has occurred:
- A sudden change in the elder’s financial position;
- The refusal of the agent to share information or records with the elder;
- Demands the elder sign unfamiliar or unexplained documents; and/or
- Financial exploitation, identify theft, or fraud.
This type of financial exploitation is illegal and punishable under California laws and federal laws. If you believe an elder is a victim of elder abuse, every county in California has an Adult Protective Services agency. Additionally, in order to have the Court order the return of the elder’s property, remove the agent and hold the agent responsible for the damages to the fullest extent of the law, a civil lawsuit will need to be filed.
If you wish to discuss your options, we would be happy to discuss your options about how to protect your right and have your rightful property returned.