When your loved one is suffering from power of attorney abuse, it can mean serious financial consequences for your loved one’s well being and diminishes your future inheritance.
A power of attorney gives a person the authority to make legal and financial decisions for someone else regarding such matters as bank accounts, the purchase and sale of real estate and the management, stock and bond transactions, retirement plans, investments and disposition of other assets. Certain powers are non-delegable such as voting, revoking or amending a will, divorce or marriage matters or fulfilling personal services under a contract matter.
But by creating a power of attorney and giving someone such important powers, there is a potential for fraud, self-interest and embezzlement by a personal representative, especially where large sums of money and substantial assets are involved and readily accessible.
Abuses of power of attorneys occur frequently in connection with elder care or the care of a person who is physically disabled or mentally incapacitated.
A disreputable representative could leave a person’s estate and their heirs without any assets or inheritance. Serious abuses generally involve state and/or federal crimes of embezzlement, theft, identity theft, fraud or forgery, and the representative can face jail time and fines as well as civil litigation and restitution of funds and property to the estate and beneficiaries.
Examples of Power of Attorney Abuse
- Opening joint banks accounts and naming the representative as a beneficiary
- Purchasing life insurance policies and naming the representative as a beneficiary or changing existing life insurance account beneficiaries
- Purchasing real estate with estate money and transferring title of real estate for the benefit of the representative
- Unauthorized gifting to individuals and charities
- Theft of property
- Unauthorized use of credit cards or establishing credit under the maker’s name
A power of attorney is in effect until a person dies unless there is an expiration limit or the maker revokes it at any time by giving written notice to the representative. Abuses of powers of attorney can be financially and emotionally devastating to a person’s estate and their heirs and beneficiaries.
Since there is such a huge potential for disagreements and fraudulent acts to arise, creating a power of attorney can lead to potential future lawsuits if the wrong person is chosen as a personal representative. Careful consideration should be taken when choosing a personal representative. A representative should possess traits of trust, honor and integrity. A family member, friend or caretaker who is readily available are often chosen as a personal representative or sometimes an attorney or business manager.
The maker or their heirs can challenge the power of attorney in court by suing the representative directly on grounds that a fiduciary duty was broken, tortuous interference or other causes of action to get the embezzled funds or property returned to the estate and beneficiaries. These matters are complex, time-consuming and most people require the assistance of an experienced New York probate estate litigation attorney to help resolve matters for them in court.
If you wish to speak to a New York estate attorney, call the Law Offices of Albert Goodwin at (212) 233-1233.