When your cousin abuses a power of attorney, that can mean serious financial consequences for your loved one’s well being and diminishes your future inheritance.
Abuses of powers of attorney can be financially and emotionally devastating to your loved one’s estate and their heirs and beneficiaries. If you are suspecting that your cousin is abusing a power of attorney, your goals are to
- have your loved one revoke the power of attorney
- have your cousin return the money and property
- contest the power of attorney
- have the court revoke, set aside or cancel out the power of attorney
- find other ways of assisting your loved one
By creating a power of attorney and giving your cousin such important powers, your loved one exposed themselves to a potential for fraud, self-interest and embezzlement by your cousin. A situation where large sums of money and substantial assets are involved and readily accessible can create a temptation for your cousin.
Relatives sometimes abuse their loved ones’ powers of attorney, when the elderly loved one needs elder care and are physically disabled or mentally incapacitated. A financially abusive cousin could leave a your loved one’s estate and their heirs without any assets or inheritance.
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 choose the wrong cousin as the power of attorney. A person should carefully consider which one of their relatives (if any) should act as their power of attorney. If someone does decide to name a relative as a power of attorney, they should pick the relative who possess traits of trust, honor and integrity and who has earned the trust of all the other relatives.
What is considered power of attorney abuse
There are plenty of ways in which a person can abuse a power of attorney. Here are some examples:
- Opening joint bank accounts and naming the cousin as a beneficiary
- Purchasing life insurance policies and naming the cousin as a beneficiary
- changing existing life insurance account beneficiaries
- Purchasing real estate with your loved one’s money and transferring title of real estate for the benefit of the cousin
- Unauthorized gifting to self
- Unauthorized gifting to individuals and charities
- Theft of property
- Unauthorized use of credit cards
- Establishing credit under your loved one’s name
What can I do if I suspect my cousin is abusing a power of attorney?
Ask your cousin to return the money or property
This may or may not work, but you can always just ask your cousin 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 your cousin, 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 your cousin is no longer in any power of authority over any of your loved one’s assets.
Bring a lawsuit against your cousin
Your loved one can contest the power of attorney in court by suing your cousin 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 your cousin is abusing and can sue the cousin 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 your cousin, 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 cousin 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 my cousin go to jail for it?
A cousin abusing a power of attorney can leave your loved one’s estate and their heirs without any assets or inheritance. Your cousin’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 your cousin 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 my cousin is abusing a power of attorney
You can prove that your cousin is abusing a power of attorney by looking at your loved one’s financial statements and property records. If your cousin is indeed abusing the power of attorney, then you will see transfers of money or property to your cousin 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 has a lot of potential for your cousin to abuse it
If your loved one gave your cousin a power of attorney, it may make sense for you to look closely into the arrangement. Perhaps ask for some financial records just to be on the safe side. You can never be too careful when it comes to power of attorney, due to the potential for abuse. A power of attorney gives your cousin the authority to make legal and financial decisions for your loved one regarding such matters as
- bank accounts, including withdrawals and transfers
- the purchase and sale of real estate
- management of assets
- stock and bond transactions
- retirement plans
- buying and selling assets
By creating a power of attorney and giving someone such important powers, there is a potential for fraud, self-interest and embezzlement by a your cousin, especially where large sums of money and substantial assets are involved and readily accessible. A situation where large sums of money and substantial assets are involved and readily accessible can create a temptation that would be hard for your cousin to resist.
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 your cousin
- 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 loved one continuing to suffer power of attorney abuse and your future inheritance to keep getting diminished, it seems like an easy choice to make.
We at the Law Offices of Albert Goodwin are here for you. We have offices in Brooklyn, NY, Manhattan and Queens. You can send us an email at email@example.com or call us at 718-509-9774.