Power of Attorney Fraud
A California Power of Attorney Fraud Attorney Can Help When You Are Abused By Someone You Trusted
Power of Attorney recognizes and legally allows for one individual – usually a trusted relative or family friend – to make a wide variety of decisions on behalf of another individual who may be elderly, frail, ill, handicapped, or incapacitated. Power of Attorney affords an immense degree of power and influence to the person bearing that status (often called the agent), and with that comes the capacity for significant abuse.
Power of attorney abuse targets those who cannot adequately care for themselves: typically elderly, sick, and disabled people. An agent is granted power of attorney in order to aid with legal, financial, medical, and other decisions. For this reason, the agent also often has access to funds, property, and personal information. To guard against power-of-attorney abuse, stay well-informed about the facts, responsibilities, and control associated with this designation. In you suspect that you or a loved one is a victim of this kind of abuse, it’s imperative that you contact a California power of attorney fraud lawyer.
What is Power of Attorney?
A Power of Attorney is a legal document that establishes a relationship between two people: the Principal and the Agent or Attorney-in-Fact. The Principal designates or authorizes the Agent to act on his or her behalf. The Power of Attorney or POA is the document that grants the authority of the Agent over the Principal.
Typically, the Power of Attorney contract remains valid until the Principal rescinds it, passes away, or loses mental capacity. But in a Durable Power of Attorney, the Agent retains all the powers and rights granted by Power of Attorney even if the Principal becomes mentally incapacitated. While this arrangement is typically intended to ensure the fulfillment of the Principal’s wishes and decisions in case of incapacity or incompetence, this situation can leave the Principal particularly vulnerable to financial abuse, since the agreement gives almost limitless power to the Agent or Attorney-in-fact over the Principal’s financial and other matters.
Another sub-category Power of Attorney is Springable Durable Power of Attorney, where the Power of Attorney becomes effective after a certain date or event specified in the contract.
How Can Power of Attorney be Abused?
Power of Attorney abuse occurs when the Agent in the agreement takes advantage of his or her position and makes decisions on the Principal’s behalf that benefit the Agent without the Principal’s knowledge or consent. Power-of-Attorney abuse can take any number of forms, the most common of which is financial abuse.
Embezzlement & Conversion
Agents under a financial Power of Attorney are given broad discretion to manage and access their Principals’ finances. As such, it can be tempting for unscrupulous agents to appropriate their Principals’ financial assets for their own gain. Commonly known as “stealing,” these crimes are referred to in the law as “embezzlement” and “conversion.” To prove that conversion has occurred, the plaintiff must show that the agent used the Principal’s assets in such a way that was inconsistent with his or her rights of ownership. This could occur, for example, where the agent takes funds that the Principal had intended to pay for a relative’s college tuition and uses them to purchase a new car for himself or herself.
While not strictly a Power of Attorney abuse issue, individuals with Power of Attorney generally hold the Principal’s trust and, therefore, are ideally situated to exercise undue influence over the Principal. In fact, they may have obtained the Power of Attorney itself by exercising undue influence over the principal. Undue influence occurs in any kind of situation where the perpetrator substantially overpowers the will of the victim that the victim’s will is essentially replaced by that of the perpetrator. It is particularly common among the elderly, as the elderly may have diminished mental capacities and tend to be dependent upon others for the activities of daily living. This type of elder abuse frequently involves the victim’s will, trust, real property deeds, and other instruments or the elder’s bank accounts and life insurance policies. As mentioned above, it can also occur where the perpetrator exercises undue influence over the victim for the purpose of obtaining Power of Attorney.
Financial Abuse and Exploitation
Because most powers of attorney allow complete control over the Principal’s finances, perpetrators of power-of-attorney abuse may steal or embezzle funds from the Principal’s account for personal use while claiming that it will benefit the elder. If an agent uses an elder’s finances or assets for personal benefit, the agent may be guilty of conversion.
Any instance of appropriating an elderly or ill Principal’s funds for personal use could constitute financial exploitation. If an agent uses their power of attorney status to make purchases, investments, or other financial transactions for their own benefit instead of the Principal’s, they could be committing power-of-attorney abuse.
Fraud, Forgery, and Identity Theft
With full access to the Principal’s accounts and personal information, a power-of-attorney scammer might open bank accounts, credit cards, or purchase annuities and insurance products in the elder’s name. These actions, bordering on identity theft, could hold the Principal accountable for any fraud or illegal conduct committed by the Agent under the guise of the Principal. Furthermore, the agent may commit welfare fraud or tax fraud using the Principal’s name and personal information, thus furthering the harm done to the elder at the gain of the Agent.
Another instance of fraud and forgery is the act of changing the principal’s estate or beneficiary designations to benefit the agent against the wishes or without the consent of the Principal.
In what could be an instance of physical abuse, an agent granted power of attorney may make inappropriate and harmful medical decisions on behalf of the Principal. These decisions include, but are not limited to: committing the elderly agent to a nursing facility; making unnecessary and expensive medical appointments or purchases, or failing to place the elder in an appropriate medical facility or access to adequate care. Whether out of malice or negligence, these actions could constitute power-of-attorney abuse.
Breach of Fiduciary Duty
Every person granted Power of Attorney owes a fiduciary duty to the Principal. These duties include, but are not limited to: keeping the elder informed about the status and any changes to the elder’s finances, medical affairs, and other accounts or information covered by the agreement; receiving consent from the elder before reaping any profit from the elder’s accounts or finances; maintaining and acting according to the elder’s interests at all times, and refraining from transferring any of the elder’s property. Failure to abide by these duties, or any breach of these duties, may constitute power of attorney abuse.
Who is At Risk for Power of Attorney Abuse?
Powers of attorney are usually granted to provide for elderly, sick, and disabled individuals who are already in emotionally and physically vulnerable positions. For this reason, dishonest individuals who seek opportunities to swindle funds from unsuspecting elders are drawn to commit Power of Attorney abuses and other types of physical and financial elder abuse.
Elders who live alone or who have few close relatives may be susceptible to Power of Attorney abuse. In many cases, a distant relative will resurface in the elder’s life and offer to sign a Power of Attorney agreement by promising to provide adequate medical care for the elder. In other instances, fraudulent estate planners or trust managers will promise to manage the elder’s finances, but designate themselves Power of Attorney in order to exploit or otherwise defraud the elder.
Signs of Abuse That Your California Power of Attorney Fraud Lawyer Will Look For
As listed above, Power of Attorney abuse can manifest itself in many ways. Given the degree of power agents normally have over the principals’ affairs, Power of Attorney abuse may not always be easy to detect. Embezzlement, conversion, and identity theft, for example, are usually not apparent to others as soon as they occur; instead, they only come to light after the funds have been significantly depleted or the Principal’s credit has been significantly damaged. Be aware of the following potential signs and symptoms of power-of-attorney abuse:
- A sudden and inexplicable change in the finances of medical affairs of the Principal
- Secrecy or reluctance to communicate by the Agent
- The Agent’s refusal or reluctance to share financial information or records with the Principal
- Any signs that the Agent is making decisions on behalf of the Principal without consulting or gaining consent from the Principal
- Any demands that the Principal sign unfamiliar or unexplained documents
- Any signs of financial exploitation, identity theft, fraud, or financial abuse
- Missing valuables, jewelry, and other personal effects from the Principal’s possession
- The Principal stops communicating with family and friends or making appearances at social events
- The Principal accompanies the agent to doctor’s appointments and lawyer consultations and speaks on behalf of the Principal in such settings
- The Principal refuses to allow friends and family to see him or her
- Sudden changes to the Principal’s will, trusts, or other testamentary documents
- Critical care expenses are not paid
If you notice any of these occurring, you should act quickly to prevent further damage to your loved one’s health or finances. A California Power of Attorney fraud attorney can help you investigate allegations of Power of Attorney fraud to determine if it is occurring and put a stop to it.
What Can I Do to Prevent Power of Attorney Abuse?
An Agent granted Power of Attorney must be a close and trusted individual – someone you fully believe will make decisions in accordance with your needs and wishes. Never grant power of attorney to a stranger, and be extremely cautious with financial advisors, caregivers, or other paid acquaintances.
Make sure to keep trusted family members, friends, and advisors informed about who has Power of Attorney status. Be sure to retain all access and control to your financial, medical, and personal records, and follow-up often to make sure no sudden or unauthorized changes have been made.
Ensure that you retain the right to take back power of attorney under any circumstance, and do not release power of attorney unless it becomes absolutely necessary. Be very cautious of signing any durable power of attorney, as it typically affords the agent total or near-complete power over your affairs. If you become suspicious of your agent’s activities, it can’t hurt to schedule a meeting with a California power of attorney fraud attorney.
Power of Attorney Fraud FAQs
Is Power of Attorney Fraud a Form of Elder Abuse?
There are many types of elder abuse, including physical elder abuse, psychological elder abuse, and financial elder abuse. While Power of Attorney abuse can be directed toward people of any age, the elderly are a particularly common target of it. This is because (a) the elderly are much more likely to have a Power of Attorney agreement in place, and (b) the elderly are more likely to suffer from diminished capacity, making them easier targets for Power of Attorney abuse. Power of Attorney abuse can be considered a form of elder abuse if it results in physical, psychological, or financial harm to an elderly person.
Can a Power of Attorney Be Contested?
Power of Attorney agreements can be contested, but it is easier to do in some cases than others. In an ideal scenario, once the Principal discovers that the agent has abused his or her authority, he or she may petition the court at any time to revoke the Agent’s Power of Attorney. However, as is often the case in situations such as these, the Principal is incapacitated and cannot petition the court by himself or herself. In third-party Power of Attorney contests, the agent’s adult children, parents, or siblings must petition the court to revoke the Power of Attorney, which the court will do if it finds that revocation is in the Principal’s best interest. This can be shown by submitting evidence of the agent’s abuse. Third-party Power of Attorney contests is significantly more complex than first-party contests. If you are considering pursuing a third-party Power of Attorney contest, you should consider speaking to a California Power of Attorney lawyer who can assist you.
Is Power of Attorney Fraud a Crime?
Power of Attorney fraud is generally handled as a civil matter. However, if it is committed against an elderly person, it may also expose the perpetrator to criminal liability under § 368 of the California Penal Code. § 368 concerns crimes against elders, dependent adults, and persons with disabilities. It applies to anyone who “willfully causes or permits any elder or dependent adult to suffer, or inflicts thereon unjustifiable physical pain or mental suffering,” and also to anyone who is not a caretaker who “violates any provision of law proscribing theft, embezzlement, forgery, or fraud, or…identity theft.” The penalties vary according to the severity of the crime but include jail time of up to seven years and fines of up to $10,000.
What Remedies Are Available to Victims of Power of Attorney Fraud?
Victims of Power of Attorney fraud are entitled to all of the damages available in civil actions, including lost income, property damages, medical bills, pain and suffering, loss of consortium, and loss of enjoyment of life, double damages under the Probate Code, attorneys’ fees and expenses, and punitive damages (if the defendant engaged in oppression, fraud, or malice), among others. Elderly victims of Power of Attorney fraud may also be entitled to attorneys’ fees and expenses and treble (triple) damages under § 3345 of the California Civil Code, which applies when the abuse involves unfair or deceptive practices that the perpetrator knew or reasonably should have known would cause financial harm to an elderly person. For more information about remedies available to the victims of Power of Attorney fraud, please contact a California Power of Attorney fraud lawyer.
The Best Protection is to Contact a California Power of Attorney Fraud Attorney
The types of abuses that can be committed with Power of Attorney are vast and serious. It is critical to remember that forcing an elder to grant a Power of Attorney against their will could be an act of Power of Attorney abuse in and of itself. Power of attorney abuse is often an instance of financial exploitation, which is illegal and punishable by federal and California state laws.
If you believe that you or a loved one has suffered Power of Attorney abuse or elder abuse in California, contact the Evans Law Firm at 415-441-8669 or 800-50-EVANS, or email firstname.lastname@example.org for a free and confidential consultation with a California power of attorney fraud lawyer.