Power of Attorney Abuse Investigation in New York: How It Works

When you suspect that an agent under a power of attorney has been misusing the principal’s money, the question is rarely just “Was something wrong?” — it is “How do I prove it?” This page explains how a power of attorney (POA) abuse investigation actually works in New York: how to obtain financial records, how to force an accounting, how forensic accounting reconstructs missing funds, and what court tools exist to recover misappropriated assets. If you are looking specifically for the legal remedies after abuse has already been confirmed, see our related pages on the breach of fiduciary duty and the discovery and turnover proceeding. This page focuses on the investigation itself.

What a New York power of attorney can and cannot authorize

In New York, durable powers of attorney are governed by General Obligations Law (GOB) Article 5-1.5, including the statutory short form power of attorney. Effective June 13, 2021, New York substantially reformed its POA statute. Key features that matter to any investigation include:

• The agent is a fiduciary. Under GOB § 5-1505, the agent must act according to the principal’s reasonable expectations and in the principal’s best interest, avoid conflicts of interest, and keep the principal’s property separate from the agent’s own.
• Record-keeping is mandatory. The agent must keep a record of all receipts, disbursements, and transactions, and must make those records available on reasonable request.
• Gifting is limited. Under the 2021 reform, the statutory form itself permits certain gifts, but gifts and other “major” self-benefiting transactions beyond the statutory authority must be expressly granted in the document. The former separate “Statutory Gifts Rider” was eliminated and folded into the modifications section of the form. Unauthorized gifting — especially gifts the agent makes to themselves — is one of the most common forms of abuse.

A power of attorney does not authorize the agent to make a will, vote in elections, make health-care decisions (that requires a health care proxy), or change the principal’s designated beneficiaries beyond what the document allows. Acts outside the granted authority are a frequent red flag.

Warning signs that warrant an investigation

An agent can be a child, spouse, sibling, friend, or professional. Regardless of who the agent is, certain transactions are inherently suspicious and may warrant a closer look:

• Opening joint bank accounts that name the agent as co-owner with right of survivorship, converting the principal’s sole accounts into joint accounts.
• Changing beneficiaries on life insurance, retirement, or payable-on-death accounts to favor the agent.
• Purchasing or transferring real estate using the principal’s funds for the agent’s benefit.
• Unauthorized gifts to the agent or to people the agent chooses.
• Cash withdrawals, ATM activity, or transfers with no apparent benefit to the principal.
• Using the principal’s credit cards or opening credit in the principal’s name.
• Outright theft or disappearance of the principal’s property.
• The agent refusing to provide records or an accounting when asked.

How a power of attorney investigation actually works

A serious POA investigation is a structured, evidence-driven process. The path differs depending on whether the principal is still living or has died, but the building blocks are similar.

Step 1: Demand a record and an accounting

The first step is usually a written demand for records. Under GOB § 5-1505(3), an agent must keep records and make them available. New York also allows certain “interested parties” — including a monitor named in the instrument, a guardian, or, in specified circumstances, a person who would be a distributee — to compel the agent to account. GOB § 5-1510 lets the court compel the agent to produce a record of all transactions and to account. A formal demand often forces an agent to either produce documentation or expose the absence of it.

Step 2: Gather the financial records

The core of any investigation is the paper trail. We assemble bank statements, cancelled checks, wire and ACH records, credit card statements, brokerage statements, deeds, mortgage records, and beneficiary-change forms. Where records are withheld, they can be obtained through court-authorized subpoenas to banks and financial institutions once a proceeding is commenced. Banks generally will not turn over a customer’s records voluntarily without a subpoena or proper authority.

Step 3: Forensic accounting

Once records are in hand, a forensic accountant (or an experienced attorney working with one) reconstructs the cash flow: matching deposits to disbursements, identifying transfers to the agent, tracing funds into the agent’s own accounts or assets, and quantifying the loss. Forensic accounting can also identify gifts, self-dealing, and transactions that have no legitimate purpose for the principal.

Step 4: Court compulsion when the agent will not cooperate

If the agent stonewalls, the courts provide tools to compel disclosure:

• If the principal is alive: a special proceeding under GOB § 5-1510 can compel the agent to account and can ask the court to construe the instrument and order relief. Where the principal is incapacitated, an Article 81 guardianship under the Mental Hygiene Law may be appropriate. A court-appointed guardian or court evaluator has the authority to investigate the principal’s finances and pursue recovery on the principal’s behalf. See our page on removing a fiduciary for related procedures.
• If the principal has died: the estate’s fiduciary can bring a discovery proceeding under SCPA 2103 to compel an examination of anyone believed to be withholding or concealing the decedent’s property, and a turnover proceeding under SCPA 2104 to compel the return of that property to the estate. These Surrogate’s Court proceedings allow examination under oath and document production. Read more on our dedicated discovery and turnover proceeding page.

Legal remedies after abuse is confirmed

When the investigation establishes misuse of the power of attorney, several causes of action and remedies may be available:

• Breach of fiduciary duty. The agent’s statutory duties under GOB § 5-1505 give rise to a claim for breach, with the remedy of returning the misappropriated funds and assets. See breach of fiduciary duty.
• Conversion and constructive trust. Where the agent took specific property or used the principal’s money to acquire assets, the court can impose a constructive trust and order turnover.
• Tortious interference. In some cases involving improper interference with the principal’s assets or expected inheritances, a tortious interference claim may be available.
• Compelled accounting and surcharge. The court can require the agent to account and surcharge (financially charge) the agent for losses caused by improper transactions.
• Revocation. A competent principal may revoke the power of attorney at any time by signed, dated written notice delivered to the agent and to any third parties relying on it.

Can the agent face criminal charges?

Serious abuse can constitute state or federal crimes — including larceny (Penal Law Article 155), forgery, identity theft, and fraud. It is true that a vulnerable principal often does not want to press charges, particularly when the agent is a family member. However, criminal liability does not depend solely on the principal’s wishes. Adult Protective Services, the police, and a District Attorney can investigate and prosecute financial exploitation of a vulnerable adult regardless of whether the principal personally files a complaint. New York treats financial exploitation of the elderly seriously. That said, most families pursue the civil route — an accounting and recovery of funds — because the practical goal is usually to get the money back into the principal’s hands or the estate.

If the principal is too frail or unwilling to act

A common obstacle is that the principal — often an elderly parent — is too frail, lacks capacity, or feels protective of the agent and refuses to sue. In those situations, an interested person may petition for an Article 81 guardianship. A guardian appointed by the court can investigate the finances, demand an accounting from the agent, and bring suit to recover misappropriated property on the principal’s behalf. The most common downside is that the proceeding can strain family relationships and the principal may resent the loss of independence, so this step requires careful judgment.

How to reduce the risk of POA abuse

Prevention matters. When creating a power of attorney, a principal should choose an agent with a demonstrated record of honesty and should consider naming a monitor under the 2021 statutory form — a person entitled to request and receive records and an accounting from the agent. Limiting gifting authority, requiring periodic accountings, and keeping the original document under control are all sensible safeguards.

Frequently asked questions

How do I get an agent’s bank records?

Banks generally require a subpoena or proper legal authority before releasing a customer’s records. Once a proceeding is commenced — for example a compelled accounting under GOB § 5-1510 or an SCPA 2103 discovery proceeding — subpoenas can be issued to the financial institutions.

Can I force the agent to account?

Yes. Under GOB § 5-1510, certain interested parties can ask the court to compel the agent to produce a record of all transactions and to account. If the principal has died, the estate’s fiduciary can compel turnover under SCPA 2104.

Does the principal have to be alive?

No. While the principal is alive, relief is sought through GOB § 5-1510 or an Article 81 guardianship. After death, the abuse is pursued through SCPA 2103/2104 proceedings in Surrogate’s Court.

What if I am the agent being accused?

An agent who has acted within their authority and kept proper records is in a strong position to defend an accounting. We also represent agents who are being unfairly accused and help them produce a clear, documented record of their transactions.

Speak with a New York power of attorney investigation attorney

Investigating and litigating power of attorney abuse is complex and document-intensive. If you believe an agent has misused a power of attorney — or you are an agent who has been unjustly accused — the Law Offices of Albert Goodwin can help. We have offices in New York City, Brooklyn, and Queens. Call 212-233-1233 or email [email protected].

About the author: This page was prepared by the Law Offices of Albert Goodwin. Albert Goodwin, Esq. is a New York attorney concentrating in estate litigation, guardianship, and fiduciary disputes, and is admitted to practice in New York. The information here is general and not legal advice; please consult an attorney about your specific situation.