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Use and Abuse of Powers of Attorney

A power of attorney is a document that lets you appoint someone you trust (“your agent” or “your attorney-in-fact”) to act on your behalf. When you create a power of attorney,you are called the “principal.” Powers of attorney can be limited in scope or can be quite broad. You might execute a power of attorney to allow someone to close an escrow while you are out of town. You might give your agent the authority to sell your car with a power of attorney. Powers of attorney can be limited to a specific act or they can be quite broad. They also can be powers that are effective immediately or “springing” powers that come into existence when you become incapacitated.

A power of attorney can be misused which is why we emphasize that your agent should be someone you trust. Unfortunately there have been many cases where an agent acting under a power of attorney has used the document to help themselves to the money or assets of the principal. It is important to recognize that a power of attorney is a very powerful tool bringing with it a fiduciary duty to act in the best interest of the person giving the power of attorney.

Some circumstances to look for if you have a loved one who has given another individual a power of attorney are a sudden change in financial circumstances of the agent or the principal or a loved one seeming to be overly trusting of his or her agent. Remember too that a power of attorney can be cancelled or a new one executed at any time.

The most frequent misuse or abuse of a power of attorney are in cases committed against the elderly, incapacitated, or other individuals who may be easily influenced. If the principal is over the age of 65, misuse of a power of attorney is elder abuse. There are legal remedies for misuse or abuse of a power of attorney. If you have questions about this area or think someone has used a power of attorney fraulently or in breach of their fiduciary duty, please contact us at Law Office of Scott C. Soady, A Professional Corporation for a free consultation.

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