Removing a Person Who Has Misused a Power of Attorney?

By August 9, 2018Blog, Estate Planning

So it appears that someone is misusing the powers granted to them under a Power of Attorney. What do you do next?

A Power of attorney is written authorization which gives one person the legal authority to act for another person. Typically, the authority to act relates to financial affairs like bank accounts, real estate transactions, and investments. It may also include medical decision making.

Once you knowingly accept an appointment as a fiduciary, you are required to look after the best interests of another party. Control over an asset and/or funds is granted to the fiduciary by the POA document. The fiduciary is entrusted to place the interests of the other party – the owner of the assets or funds, or the beneficiary of those assets – ahead of his own interests.

An agent-principal relationship is established between the fiduciary and the owner of the assets. The fiduciary is the agent and the owner of the funds is the principal. Fiduciaries owe two main duties to their principals – a duty of loyalty and a duty of care. Under the duty of loyalty, as mentioned above, a fiduciary must not derive any direct or indirect profit from their position and must avoid conflicts of interest. The duty of care requires that the fiduciary perform his functions with a high level of competence and thoroughness in line with industry standards.

Many principles ask a trusted family member to take on the POA responsibility. This oftentimes works well, but sometimes it does not. This oftentimes results in a breach of the POA and fiduciary duty. If you suspect that there has been a breach of duty, you need to act quickly so that you can prove the breach happened, and possibly recoup your losses or the losses of your loved one.

One of the most common incidents involves the misuse of assets after the principle dies. A Power of Attorney expires once the principle passes away. Many incidents of misuse include managing the agent’s affairs and assets with the power of attorney after their death. Recourse usually involves opening an Estate for the deceased principle in order to go after the person formally holding the Power of Attorney.

What should you do if this type of abuse happens to you? The answer is to contact an attorney. The attorney can assist in revoking the Power of Attorney, in demanding the return of any stolen money or property, and, if necessary, help you to file a lawsuit against the person who has abused their power. The most common legal claims in a case of abuse of POA are “breach of fiduciary duty” and “conversion.” It is also possible for the guilty party to be charged criminally with embezzlement, theft, or fraud.

If you believe the person given Power Of Attorney for your loved one is trying to manipulate their power to their own advantage, you should contact an attorney who can aid in reviewing your situation. It is possible the person may simply have been negligent, but it is important to investigate what is going on before it is too late to recover stolen funds.

Dealing with a breach of Power of Attorney and fiduciary matters can become very complex and it is possible you will need the services of an attorney to aid in recovering funds. If you have questions regarding the use of a Power of Attorney for someone in the state of Michigan, call us to discuss what options may be available to you.

Bruce Rice

About Bruce Rice

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