How Can I Revoke The Agent's Authority for Abusing a Power of Attorney?
Full Question:
Answer:
An agent has a fiduciary duty to act in compliance with the durable power of attorney according to law and in accordance with the terms of the document. The answer depends in part on what type of power of attorney was created by your father. If your father is not competent to create a valid power of attorney, and there is no successor agent in the document, you may need to petition the court for relief or investigate whether you want to pursue a guardianship.
If the fiduciary is given “discretion” with respect to a matter, to exercise that “discretion” in a reasonable manner. He or she must impartially administer the durable power of attorney for the benefit of the beneficiaries, which include the current beneficiaries as well as the potential remainder beneficiaries. The fiduciary must remain impartial and not favor any beneficiary over another, especially if the fiduciary is also a beneficiary.
The fiduciary must protect and preserve the assets subject to control by the fiduciary and to ascertain that these assets are invested in a prudent and cautious manner. Also to be avoided is a conflict of interest, such as entering into transactions with assets that will result in a profit to the fiduciary personally.
If these duties are not properly or competently performed, the fiduciary may have to answer to anyone harmed as a result. If it is suspected that an agent has abused his or her authority, interested parties may petition the probate court for a review and accounting. Sometimes it is necessary to petition for guardianship of an incapacitated person.
Fiduciaries, such as trustees, 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)
