How Do I Modify A Power of Attorney That is Being Abused?
Full Question:
Answer:
The power of attorney may be modified by the principal to limit the powers granted, such as only to certain transactions, time periods, upon obtaining consent in writing, etc. However, it may be advisable to revoke the current power of attorney and create a new, more limited one to avoid issues of interpretation in the future.
The person designated to be the agent assumes certain responsibilities. The agent is obligated to act in the principal's best interest. The agent must always follow the principal's directions. Agents are "fiduciaries," which means that the agent must act with the highest degree of good faith in behalf of their principals. The agent must keep his money separate from the principal's; keep detailed records concerning all transactions he engages in on the principal's behalf; not stand to profit by any transaction where the agent represents the principal's interests; and not make a gift or otherwise transfer any of the principal's money, personal property, or real estate to himself unless the power of attorney explicitly states he can do so.
Various remedies may be available if a fiduciary duty was breached. Common actions for an abuse of a power of attorney, among others, include a petition for an accounting, claim of breach of fiduciary duty, theft, conversion, or a fraud charge.
Fiduciaries owe two main duties to their clients: a duty of loyalty and a duty of care. The duty of loyalty requires that fiduciaries act solely in the interest of their clients, rather than in their own interest. Thus fiduciaries must not derive any direct or indirect profit from their position, and must avoid potential conflicts of interest. The duty of care requires that fiduciaries perform their functions with a high level of competence and thoroughness, in accordance with industry standards.
The elements of a cause of action for breach of fiduciary duty are:
(1) Plaintiff and Defendant share a relationship whereby:
(a) Plaintiff reposes trust and confidence in Defendant, and
(b) Defendant undertakes such trust and assumes a duty to advise, counsel and/or
protect Plaintiff;
(2) Defendant breaches its duties to Plaintiff; and
(3) Plaintiff suffers damages.
The elements of a claim for breach of fiduciary duty are not fixed as the claim may arise from virtually any case where one party accepts the trust and assumes the duty to protect a weaker party.
Affirmative defenses to a claim for breach of fiduciary duty can include, but are not limited to:
(1) The passing of the statute of limitations for filing the claim.
(2) Lack of fiduciary relationship (for example, when the parties did not enter a fiduciary relationship, but rather conducted business in an arm’s length transaction there is no duty to protect the other party or disclose facts which the other party could have discovered by its own diligence.)
(3)Lack of standing
(4) Approval (for example, if the alleged actions followed full disclosure to and the consent of the Plaintiff)
(5) Business judgment rule (ex. that the corporate fiduciary's actions were motivated by a bona fide interest in the well being of the corporation where shareholders are the ones owed the fiduciary duty)
(6) Due diligence was exercised
An abuser may drain a joint bank account or use a power of attorney to sell an elder's property and keep the proceeds. To prevent financial abuse, certain steps must be taken. At the first sign of misuse, the remaining assets must be removed from the abuser's control. If the elder gave a power of attorney, it must be revoked in writing. The revocation must be sent to the abuser, and to each place where he or she might use the power of attorney. If the abuser is on any joint bank accounts, the elder must remove the remaining money and open a new account in the elder's name only. If the money cannot be withdrawn because the abuser has the bank book or the account is not yet payable, the elder can file a lawsuit to have the account frozen until the court determines ownership.
An elder tricked or forced into giving an abuser real property can recover it with a constructive trust, rescission, or similar law suit. If the property has since been sold to an innocent person, the proceeds can recovered as damages. Unlawfully taken personal property can be returned through a claim and delivery action. Remedies can be combined in a lawsuit, and tailored for special problems like lost profits, rents, or damages. Any remedy sought, however, must clearly show the losses to be the result of abuse and not just an effort to take back a gift an elder now regrets making. An abuser who has already spent the elders money or destroyed the elder's personal property can be sued under contract or tort theories of law. A court can order the abuser to pay a money judgment as compensation for the loss. If the abuser will not pay voluntarily, his or her wages or bank accounts can be garnished or property seized and sold. Unfortunately, some abusers are without money or assets and judgments against them may go unsatisfied.