Power of attorney abuses can take many forms. It is committed by both family members and non-family.
Sometimes it’s caused because the POA agent does not understand 1) his/her role (mismanagement, improper accounting, poor investment decisions) and 2) duties the agent owes the principal (the person who executed the POA). A POA is supposed to act in the best interest of the principal when handling transactions for the principal.
Other times the abuse is intentional. This is where the POA abuse is targeted and opportunistic. This is when the POA agent takes the opportunity to exploit a vulnerable POA principal. Sometimes the individual will deliberately enhance his or her relationship with the elderly POA principal to become that elderly person’s agent, then the agent commits the abuse.
Here are 3 different categories of POA Abuse:
1) Performing transactions that exceed the POA authority, eg. gifts of POA principal’s property when limited or no gifting authority
2) Self-dealing transactions such as POA Agent buying a car for him or herself, rather than for the benefit of the POA principal
3) Transactions that contravene POA principal’s expectations, such as when POA agent does have gift making authority, but makes gifts that are not in the best interest of the POA principal or undermine the principal’s estate planning.
POA abuse can also occur by the agent tricking or inducing a principal to sign a POA when the elderly person is incompetent, lacks decision making ability, or is under undue influence.
In an upcoming blog, Kirk Sanders will discuss some methods to prevent or protect against POA abuse.
If you or someone you care for has been a victim of POA abuse, contact Sanders Law Firm, PLLC 336-768-1515 as soon as possible to limit the exposure to the POA abuse.