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Abuse of a Power of Attorney

By March 6, 2018August 6th, 2019Estate Planning, Probate

What exactly is a Power of Attorney? Well in its basic form, this document enables someone to delegate important decisions regarding financial affairs and medical decisions depending on the type. In Michigan, these documents become effective as soon as they are  executed and the designee accepts the appointment. The grantor of the power is called the “Principal,” and the recipient who has the responsibility of carrying out the affairs is called the “agent.” Ideally, the document allows the person delegated by the power of attorney document (called an attorney-in-fact) to carry out the affairs of the designator so their financial and medical affairs can continue. When used properly, these documents provide an excellent source of management and ease of life for those dealing with incapacity issues or major medical events. When mismanaged, they can financially cripple the principal and land the agent in hot water with the probate court, or even the prosecutor.

There are several people who can challenge the actions of an “agent”. The principal, a guardian, conservator, trustee, or special fiduciary acting for the principal or the principal’s estate, a person authorized to make health care decisions, governmental agency, or any other interested party if that person demonstrates to the Court that the person is interested in the welfare of the principal, and believes that Court Intervention is necessary.

Additionally, a power of attorney can be revoked, assuming that principle still has the mental capacity to do so. However, many cases  of a power of attorney abuse occur when the principle incapacitated, is under the influence of the agent who provides care, or is simply unaware of the misuse of their funds by the agent.

An agent is a fiduciary and therefore must always act for the benefit of the grantor, in accordance with the expectations of the grantor. Oftentimes, there are circumstances in which family members believe that the designated agent of a decedent, or grantor, took money for themselves to the detriment of the grantor or other beneficiaries under an estate plan. An agent who personally takes the principal’s assets and does not use them solely for the principal’s benefit, has breached a fiduciary obligation. As a result, if an agent has stolen money from an account, the grantor may implore a Court to compel an accounting of the records. The Court may require the agent to account for every transaction made during their time as fiduciary. If the agent is found to have wrongfully taken money from a principal, the agent may be required to pay the value the property would have had if the violation didn’t exist. The agent also is responsible to pay for any attorney fees or costs associated with the wrongdoing.

Whatever the circumstances, know that abuse of a power of attorney is fraud. Unfortunately, abuse of a power of attorney is one of the most common forms of elder abuse. If you suspect that someone has taken advantage of an individual via a power of attorney, or if you believe that your agent has misused your power of attorney, please call us to determine your possible options.

Bruce Rice

Bruce Rice a graduate of Wayne State University Law School practices Family Law, Estate Planning and Probate Litigation and Administration. View Profile

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