When your sibling abuses a power of attorney, that can mean negative financial consequences for your parent’s well-being. It can also diminish your future inheritance.
Abuses of powers of attorney can be financially and emotionally devastating to your parent’s estate and their heirs and beneficiaries. If you are suspecting that your sibling is abusing a power of attorney, here are some of the goals to have in mind:
- Have your parent revoke the power of attorney
- Have your sibling return the money and property
- Contest the power of attorney through the court system
- Have the court revoke, set aside or cancel out the power of attorney
- Find other ways of assisting your parent
By creating a power of attorney and giving your sibling important powers, your parent exposed themselves to the potential for fraud, self-interest and embezzlement by your sibling. A situation where large sums of money and substantial assets are involved and readily accessible can create a temptation for your sibling.
Children sometimes abuse their parents’ powers of attorney, when the elderly parent needs elder care and are physically disabled or mentally incapacitated. A financially abusive sibling could leave your parent’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 parents choose the wrong sibling as the power of attorney. A parent should carefully consider which one of their children (if any) should act as their power of attorney. If a parent does decide to name a child as a power of attorney, they should pick the child who possesses traits of trust, honor and integrity and who has earned the trust of their siblings.
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 sibling as a beneficiary
- Purchasing life insurance policies and naming the sibling as a beneficiary
- changing existing life insurance account beneficiaries
- Purchasing real estate with your parent’s money and transferring title of real estate for the benefit of the sibling
- Unauthorized gifting to self
- Unauthorized gifting to individuals and charities
- Theft of property
- Unauthorized use of credit cards
- Establishing credit under your parent’s name
What can I do if I suspect my sibling is abusing a power of attorney?
Ask your sibling to return the money or property
This may or may not work, but you can always just ask your sibling 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 parent to revoke the power of attorney
The simples thing to do would be to explain to your parent that they are possibly being defrauded by your sibling 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 sibling is no longer in any power of authority over any of your parent’s assets.
Bring a lawsuit against your sibling
Your parent can contest the power of attorney in court by suing your sibling 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 parent. 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 parent can revoke the power of attorney that your sibling is abusing and can sue the sibling 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 sibling, thinking that they don’t want them to get into any kind of trouble with the law.
Place a guardianship over your parent
One option may be to obtain guardianship over your loved one. Once you are a guardian, you can bring a lawsuit against the sibling 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 parent and ultimately to benefit the estate and beneficiaries.
There are some downsides to the guardianship proceeding, the most common downside being that your parent can resent you for bringing a proceeding that 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 sibling go to jail for it?
A sibling abusing a power of attorney can leave your parent’s estate and their heirs without any assets or inheritance. Your sibling’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 sibling will face jail time, as your parent is unlikely to press charges against their child. 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 sibling is abusing a power of attorney
You can prove that your sibling is abusing a power of attorney by looking at your parent’s financial statements and property records. If your sibling is indeed abusing the power of attorney, then you will see transfers of money or property to your sibling or unexplained cash withdrawals. You can ask your parent 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 sibling to abuse it
If your parent gave your sibling 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 sibling the authority to make legal and financial decisions for your parent 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 sibling, 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 sibling 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 parent, who can revoke it by giving written notice to your sibling
- 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.
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.