When the caretaker abuses a power of attorney, that can mean serious financial consequences for your loved one’s well being and diminishes your future inheritance.
By creating a power of attorney and giving the caretaker such important powers, your loved one exposed themselves to a potential for fraud, self-interest and embezzlement by the caretaker. A situation where large sums of money and substantial assets are involved and readily accessible can create a temptation for the caretaker.
Caretaker can abuse your loved one’s powers of attorney, when the elderly person elder care and are physically disabled or mentally incapacitated. A financially abusive the caretaker could leave a your loved one’s estate and their heirs without any assets or inheritance.
A power of attorney gives the caretaker the authority to make legal and financial decisions for your loved ones 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.
(At least the power attorney doesn’t work for things such as voting, revoking or amending a will, divorce or marriage matters or fulfilling personal services under a contract matter.)
A power of attorney is in effect until your loved one dies unless there is an expiration limit. Or, your loved one can revoke the power of attorney at any time by giving written notice to the caretaker (hopefully with a copy of the notice to you). Abuses of powers of attorney by a the caretaker can be financially and emotionally devastating to the loved ones, who may feel surprised and betrayed by this misconduct.
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 loved ones chooses the a caretaker as the power of attorney.
How can the caretaker abuse a power of attorney
There are plenty of ways in which the caretaker can abuse a power of attorney. Here are some examples:
- Opening joint bank accounts and naming the caretaker as a beneficiary or co-owner with right of survivorship
- Purchasing life insurance policies with your loved one as insured and naming the caretaker as a beneficiary or changing existing life insurance account beneficiaries
- Purchasing real estate with your loved one’s money and transferring title of real estate for the caretaker’s benefit
- Unauthorized gifting to the caretaker
- Outright theft by the caretaker of the loved one’s property
- Unauthorized use by the caretaker of credit cards or establishing credit under the loved one’s name
What can I do if I suspect my loved one’s caretaker is abusing a power of attorney?
Ask the caretaker to return the money or property
This may or may not work, but you can always just ask the caretaker to return the money or property. It could be that their plan was to only abuse the power of attorney if they could get away with it. Now that they are discovered, they may decide to cut their losses and not have to deal with a civil lawsuit or even criminal prosecution, and they might just return the money or property in question.
Ask your loved one to revoke the power of attorney
The simples thing to do would be to explain to your loved one that they are possibly being defrauded by the caretaker, and ask them to revoke the power of attorney in writing (hopefully with a copy to you). You may or may not choose to follow up and make sure that the caretaker is no longer in any power of authority over any of your loved one’s assets.
Bring a lawsuit against the caretaker
Your loved one can contest the power of attorney in court by suing the caretaker on grounds that a fiduciary duty was broken, tortuous interference or other causes of action to get the embezzled funds or property returned to your loved one. These matters are complex, time-consuming and most people require the assistance of an experienced litigation attorney to help resolve matters for them in court.
Although your loved one can revoke the power of attorney that the caretaker is abusing and can sue the caretaker to get the money back, they are often too old and frail and don’t have the will power or sometimes even the mental capacity to bring a lawsuit. They also feel bad for the caretaker, thinking that they don’t want them to get into any kind of trouble with the law.
Place a guardianship over your loved one
One option may be to obtain guardianship over your loved one. Once you are a guardian, you can bring a lawsuit against the caretaker abusing the power of attorney on grounds that a fiduciary duty was broken, tortuous interference or other causes of action to get the embezzled funds or property returned to your loved one and ultimately to benefit the estate and beneficiaries.
There are some downsides to the guardianship proceeding, the most common downside being that your loved one can resent you for bringing a proceeding which compromises their independence. These matters are complex, time-consuming and most people require the assistance of an experienced New York guardianship attorney to help resolve matters for them in court.
Is abusing a power of attorney criminal, can the caretaker go to jail for it?
A caretaker abusing a power of attorney can leave your loved one’s estate and their heirs without any assets or inheritance. The caretaker’s power of attorney abuse described above typically involves one or more of the following potentially criminal conduct:
- Identity theft
Having said that, it is unlikely that the caretaker will face jail time, as your loved one is unlikely to press charges against their relative. Besides, the police tends to view power of attorney abuse as a civil matter.
Can I report the abuse to adult protective services?
Reporting power of attorney abuse to the adult protective services is likely to not yield a result, as those government agencies typically view this issue as a civil matter. Your best opportunity to resolve the situation is to retainer the services of an attorney who has experience in these kind of matters. However, if other types of abuse are present, then you do want to report the abuse to adult protective services.
How can I prove that the caretaker is abusing a power of attorney
You can prove that the caretaker is abusing a power of attorney by looking at your loved one’s financial statements and property records. If the caretaker is indeed abusing the power of attorney, then you will see transfers of money or property to the caretaker or unexplained cash withdrawals. You can ask your loved one to show those documents to you or to give you access to those documents. If that is not possible, then your attorney would know how to get those documents.
A power of attorney is in effect until
- The person who made it dies
- It expires (if it has an expiration date)
- It’s revoked by your loved one, who can revoke it by giving written notice to the caretaker
- It is successfully contested and is revoked by the court
How much does it cost to hire a lawyer for this type of matter
Attorneys generally charge by the hour. In our firm, we charge $400 per hour and require a retainer deposit of $4,000 to work on a case. No one likes to spend money on lawyers, but if the alternative is your parent continuing to suffer power of attorney abuse and your future inheritance to keep getting diminished, it seems like an easy choice to make.
If you are having issues with the caretaker who is abusing power of attorney or being unjustly accused of such, we at the Law Offices of Albert Goodwin are here for you. You can call us at 718-509-9774 or send us an email at email@example.com.