Who Can Override a Power of Attorney?
What happens if a power of attorney agent is not acting responsibly or engaging in self-dealing? What can family members and loved ones do when they suspect an agent of acting unethically or illegally? Who has the power to revoke the authority of a power of attorney document if an agent refuses to step down?
When a power of attorney agent fails to perform their duties toward the principal, many questions arise, including the following:
- What happens if a power of attorney agent is not acting responsibly or engaging in self-dealing?
- What can family members and loved ones do when they suspect an agent is acting unethically or illegally?
- Who can revoke the authority of a power of attorney document if an agent refuses to step down?
A power of attorney is an important legal document for estate planning. When you draft or sign a power of attorney document, you trust someone to act on your behalf. Regardless of the type of power of attorney, you expect this person to act in your best interests.
It is challenging to choose the right person to give such authority. Until a person has held that position, it's hard to know if they will act responsibly under state laws. When a principal names an agent, that agent must take the responsibility seriously. They are bound to a fiduciary duty to act in the best interests of the principal.
However, what happens if an agent is not acting responsibly or engaging in self-dealing? What can family members and loved ones do when they suspect an agent of acting unethically or illegally? Is revocation a possibility? If so, who can revoke the authority of a power of attorney document if an agent refuses to step down?
This article discusses the following:
- The rights an agent gains from a valid power of attorney document
- How an agent may abuse those rights when making financial or medical decisions
- What legal action to take to remove the agent from the power of attorney
Fiduciary Duty of Agent
The person granted authority to make decisions is called an agent, or an attorney-in-fact. "Attorney-in-fact" does not mean the individual is an actual attorney. It means they are authorized to act by a power of attorney. The agent is supposed to act on behalf of the principal. Power of attorney rights require the attorney-in-fact to act according to the principal's wishes. They must act in the principal's best interest. This is called a fiduciary duty.
Types of Power of Attorney
The type of POA determines the legal rights of the attorney-in-fact.
Durable Power of Attorney
A durable power of attorney (DPA) gives the agent authority to act even when the principal becomes incapacitated or incompetent. For a power of attorney to be durable, it must state something similar to "This power of attorney shall not be affected by subsequent disability or incapacity of the principal or lapse of time." If the power of attorney does not contain such language, the power of attorney ends when the principal is no longer able to make their own decisions.
Limited Power of Attorney
A limited power of attorney document specifies what the agent should do. A limited power of attorney may allow the attorney-in-fact to sign a real estate document or a business contract.
General Power of Attorney
With a general power of attorney, the agent may not know what the principal wants. They will have to use their best judgment.
This is when problems can arise. An agent may make poor decisions that prove not to be in the best interest of the principal. Or they may be themselves incompetent to make decisions.
Financial Power of Attorney
A financial POA gives the agent general or specific authority to:
- Initiate financial transactions
- Access bank accounts
- Write checks
An agent with financial power of attorney could close an account at one financial institution and open another account. They could decide to sell assets to improve the liquidity of the person's estate. That may be the right decision when needing to pay for medical care. They could sell a car or even a home.
Health Care Decisions
A medical power of attorney allows an agent to make medical decisions on behalf of an incapacitated person. It is also known as a health care power of attorney. Ideally, the person has provided instruction in a living will or advance directive, but that isn't always the case. Sometimes it is up to the agent to do what they believe the principal would have wanted.
It's challenging to make life-or-death decisions in a crisis. Sometimes an agent acts against the express wishes of the principal. The agent may believe that, given the situation, it's in the person's best interest.
An agent may occasionally make an end-of-life medical decision while weighing their interests. Or at least that's what other family members think.
It's not unusual for family members to have conflicting opinions about Do Not Resuscitate (DNR) orders and other decisions about life-prolonging treatment. A difference of opinion is not necessarily an abuse of power.
Types of Abuse
An agent can abuse their power of attorney role in various ways. The agent can engage in the following:
Abuse of the legal rights granted by a power of attorney is a crime. Increasingly, states are recognizing elder abuse through an attorney-in-fact. It often takes family members to bring it to the attention of the police, though. The vulnerable person often lacks the mental capacity or the resources to protect themselves.
But the agent could also sell the home so they can gain personal access to those financial resources. They may "invest" those funds in their own business. The agent could change beneficiaries for personal gain. They may buy the car at a steep discount. Any number of self-interested transactions could amount to an abuse of the power of attorney role.
Legal Action To Revoke a Power of Attorney
The person who signed the power of attorney form can revoke the agent's authority if they are of sound mind. They can draft a new document to take power of attorney away from one person and grant it to an alternate agent.
But what if the principal is suffering from a mental incapacity like dementia or is in the hospital in a coma? Can family members override the power of attorney and decisions of the attorney-in-fact? Can they take action to revoke a power of attorney when they suspect abuse?
Yes, they can.
Typically, it will require the help of an elder law attorney or disability law attorney to petition the court. The attorney must convince a judge that an agent is not acting in the principal's best interest. The attorney must present evidence of the DPA's abuse or negligence.
Armed with evidence of wrongdoing, the lawyer can ask the agent to step down. This will allow an alternate agent named in the power of attorney document to take control. When an agent refuses to step down, or there's no alternate, a loved one must file a court application. Depending on state law, the incapacitated person will need either a guardian or a conservator. The loved one must apply to the court for guardianship or conservatorship of the person.
What if the principal, an elder with dementia, isn't aware of the abuse? What if they still trust or fear the person who is abusing them? Can family members still get a power of attorney revoked?
Yes, they can.
Evidence of abuse can override the principal's preferences when the principal has diminished mental capacity. But there must be evidence of the misuse of authority, not simply a difference of opinion.
Seek Legal Advice If You Believe a Loved One Is at Risk
If you think a loved one or family member is being taken advantage of by someone who holds their power of attorney, talk to an experienced lawyer in the elder law or estate planning field. They will explain your legal options in the situation.
Can I Solve This on My Own or Do I Need an Attorney?
- DIY is possible for simple cases, such as creating powers of attorney
- Cases with complex finances and agent situations are rarely cut and dry
- Attorneys offer tailored advice and answer your legal questions
- Many attorneys offer free consultations