Stealing inheritance using a power of attorney is a real pervasive issue that is happening every day. It does not only occur in a family setting, but can happen when a person, especially an elderly one, entrusts another person, who could be his caregiver, employee, financial advisor, or friend, with a power of attorney.
A power of attorney is a powerful document that allows the agent to do actions on behalf of the principal. A person holding a power of attorney is a fiduciary and has strict fiduciary duties which obligates him to always act in the best interests of the principal, even if it will conflict with his own self-interest. However, not everyone holding a power of attorney has the moral fabric to act in accordance with these fiduciary duties. We encounter a lot of cases where persons holding a power of attorney abuse this power, financially draining the principal of his wealth, and in effect, stealing the inheritance of the principal’s heirs.
What can you do when a person with Power of Attorney is stealing?
When a person with a power of attorney is stealing or abusing his authority, your legal remedy would depend on whether you are the principal or an interested third person.
Legal remedy if you are the principal
If you are the principal and your agent has been stealing from you using the power of attorney, you must immediately revoke your power of attorney by signing a document of revocation, executing it in the same manner as a power of attorney, and giving this revocation document to the agent and all other parties and institutions who have knowledge of this power of attorney.
After revoking this power of attorney, you can file a lawsuit against the agent for the recovery of what has been stolen from you. You can request the court, aside from recovery, of payment of punitive damages and lawyer’s fees.
For example, you gave your son a power of attorney to conduct bank transactions and sell real property in your behalf. Your son sold one of your real properties without you knowing it and started taking money from your bank account and transferring it to his own account. Once you discover these transactions, you must immediately execute a document revoking your son’s power of attorney. You must give your bank a copy of your revocation so your son’s future transactions will not be honored. For money that has already been stolen and for the real property that has already been sold, your recourse is to file a lawsuit to recover the sales proceeds of the property and the money stolen from your bank account from your son.
Can you recover the real property from the third party? If the buyer of the real property is in good faith and paid sufficient valuable consideration, it will be more difficult to recover that property from the third party. Your best option is to recover the sales proceeds from your son.
Legal remedy if you are an interested third party
If you are an interested third party and you find that the principal is not doing anything even if his agent is stealing, you can file a petition for guardianship to revoke the power of attorney if the principal is mentally incapacitated. This usually happens when the principal is elderly.
In New York, a person is mentally incapacitated and can be subject of a guardianship proceeding when he is:
- unable to care for his own property and/or personal needs, and
- likely to suffer harm because he cannot understand the consequences of not being able to care for his property and/or personal needs.
To file a petition to revoke someone’s power of attorney and for guardianship, you must be an interested party. Usually, interested parties are family members or a qualified agency.
Revoking someone’s durable power of attorney requires proof of misconduct because you are asking the court to substitute its own judgment over that of the principal on who should be the principal’s agent. Acts of misconduct include withdrawing funds from the bank account and failing to account for these funds.
If you have been a victim of power of attorney abuse or you would like to revoke the power of attorney of a loved one and petition for guardianship, we, at the Law Offices of Albert Goodwin, are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at email@example.com.