What Happens When A Power of Attorney Acts Improperly?

A person appoints a power of attorney (POA) to make decisions for himself or herself – usually a spouse, parent, or adult child — for a variety of reasons. Most commonly, people create POA’s to be prepared if tragedy strikes, such as a car accident, or the mental decline that often comes along with aging. Without a proper POA in place, a family of someone with dementia or Alzheimer’s disease, for example, would need to go to court to obtain guardianship or conservatorship to be able to protect and make decisions for the person no longer able to do so.

When someone grants POA to another individual, it gives great power but also great responsibility. Unfortunately, some people who are granted the power of a POA are dishonest and may sometimes take advantage of the power for their own selfish interests. They may take money from a bank account, retitle investments, sell real estate or an automobile to a family member at far less than fair value, or even cause changes to a will, trust, or beneficiary designation in a life insurance policy. Some POAs even begin writing checks from the person’s account to pay their own bills. All of these can give rise to breach of fiduciary duty claims, which can lead to civil – and sometimes even criminal – remedies.

What do you do if you suspect someone has abused the authority given to him or her as a POA? The first step is to consult with an experienced probate litigation or elder law attorney to learn what rights and options you have.

Legal Actions That Can Be Taken Against a Dishonest POA

Generally, there are two different types of legal actions that can be taken to try to undo the damage caused by a dishonest POA. If the person who created the POA is still alive, then typically a guardianship or conservatorship proceeding is needed to appoint a proper decision-maker. Then a claim can be filed through that legal proceeding, or at times, a separate lawsuit, to recover the assets that were wrongfully taken, transferred away, or spent.

Just because a POA is already in place does not mean you cannot obtain guardianship or conservatorship. The probate court is there to protect vulnerable adults, as well as those who have passed away, and judges do remove legal authority from POAs who act improperly.

The second course of action is available if the person who was taken advantage of is no longer alive. Then, it is necessary to raise a breach of fiduciary claim in the name of the deceased person’s estate – through the personal representative (which is what executors are called in Michigan), or in a related court petition in probate court.

Many people mistakenly assume that a person holding the POA automatically becomes the estate administrator after death. That is not the case; rather the will governs who controls the estate — or the probate judge selects someone if there is no valid will. Even when the person who abused a POA in turns becomes the executor, a breach of fiduciary duty claim can still be filed against that person, if properly asserted in probate court.

What to Do If a POA Acts Improperly

If you find yourself in the unfortunate situation of being concerned of POA abuse – or if someone is wrongly accusing you of committing it – it’s critical to work with the right Michigan power of attorney lawyer, as soon as possible. While many lawyers say they can handle cases of this nature, this area of law is very specialized. Working with a good attorney who really knows, and has handled, cases involving POA abuse and fiduciary duty breaches can make the difference between winning and losing.

The experienced elder law and probate litigation attorneys at Barron, Rosenberg, Mayoras & Mayoras, P.C. are there to help you. Call them today at (248) 641-7070, for a free consultation, if you want to explore your rights involving a case of suspected or alleged abuse of a power of attorney.