Can an Agent in a Power of Attorney Commingle Funds?

Full Question:

Is an estate attorney representing my sister and myself in the Estate of our parents colluding when said atty talks with my sisters husband who is an atty and states that she has never seen a more serious case of abuse of the Power of Atty.? I was named as the POA by my Dad upon his death 3/28/07 to care for my Moms needs.For five years I have dedicated my life 24/7 to my Dad with bone cancer and then for my Mom who had 2 stokes and diagnosed with vascular dementia.My Sister became incensed over me being named POA. After my Dads death I opted to keep my Mom at home.She improved in her state.Always knowing the names of all those around her and also improving over time to reading the paper,watching movies with comprehension and asking to listen to certain music by names.This can be validated by the caretakers and myself as a Medical Doctor-along with the Mayo Doctors whose care she was under. My Sister wanted to place my our Mom in a facility because of the amount of money that she stated was not justified.As A side bar her husband (Pete) is the atty that the Estate Atty made this statement to:they have been married for 5 years and this time frame correlates with the exact time frame my Sister started having a severe breakdown in our previously close Sisters relationship. I firmly believe this to be a grievous problem. I will admit to a commingling of monies. Mine with my Parents.We have in the past ALWAYS been a close family and never did I count the cost or receive any salary for my 5 years of care.Please help me as it has been said to third party from my Sister that she would hate to see me go to jail over this...Please I need desperately your input or legal understanding in this matter.My parents wanted to pay me however there was no amount of money I could ever place on this,as I choose to do this .
06/28/2010   |   Category: Fiduciary Duty   |   State: Florida   |   #22498

Answer:

The answer will depend on the nature of the claim, such as whether a breach of fiduciary duty, elderly abuse, or theft is claimed. If a criminal complaint is filed, the prosecution will have to prove criminal intent beyond a reasonable doubt.

Fiduciaries, such as an agent under a power of attorney, 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. Commingling of funds is allowed if stated so in the power of attorney document. Otherwise, the fiduciary may be accused of converting the funds to personal use. The agent should keep records of expenditures made on behalf of the principal. An accounting may be petitioned for and ordered by a court. We suggest you consult a local attorney who can review all the facts and documents involved.

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)

Please see the following FL statute:

825.103 Exploitation of an elderly person or disabled adult; penalties.--

(1) "Exploitation of an elderly person or disabled adult" means:

(a) Knowingly, by deception or intimidation, obtaining or using, or endeavoring to obtain or use, an elderly person's or disabled adult's funds, assets, or property with the intent to temporarily or permanently deprive the elderly person or disabled adult of the use, benefit, or possession of the funds, assets, or property, or to benefit someone other than the elderly person or disabled adult, by a person who:

1. Stands in a position of trust and confidence with the elderly person or disabled adult; or

2. Has a business relationship with the elderly person or disabled adult;

(b) Obtaining or using, endeavoring to obtain or use, or conspiring with another to obtain or use an elderly person's or disabled adult's funds, assets, or property with the intent to temporarily or permanently deprive the elderly person or disabled adult of the use, benefit, or possession of the funds, assets, or property, or to benefit someone other than the elderly person or disabled adult, by a person who knows or reasonably should know that the elderly person or disabled adult lacks the capacity to consent; or

(c) Breach of a fiduciary duty to an elderly person or disabled adult by the person's guardian or agent under a power of attorney which results in an unauthorized appropriation, sale, or transfer of property.

(2)(a) If the funds, assets, or property involved in the exploitation of the elderly person or disabled adult is valued at $100,000 or more, the offender commits a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(b) If the funds, assets, or property involved in the exploitation of the elderly person or disabled adult is valued at $20,000 or more, but less than $100,000, the offender commits a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(c) If the funds, assets, or property involved in the exploitation of an elderly person or disabled adult is valued at less than $20,000, the offender commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.