3 Potential Ways to Challenge a Power of Attorney
A power of attorney (POA) is one of the most powerful (and potentially risky) documents one can sign: It gives a third party "agent" the ability to control the assets of the "principal" as if the agent were the principal. Depending on how broad the POA is, that could mean anything from controlling one's financial accounts to controlling everything: healthcare decisions, investments, property, and accounts.
With that much power comes a duty to act in the principal's best interest. As you might expect, that doesn't always happen. And if an agent is abusing his or her power, and the principal can't revoke the POA (a typical example would be a principal who is mentally incompetent), you might want to challenge that POA in court.
How? Here are a few ideas:
1. The Principal Is Mentally Incompetent.
Just as a principal can grant a power of attorney to anyone of their choosing, it is usually up to the principal to revoke that grant. If you want to step in, and have a court override the principal's decision, you're going to need to give the court a good reason for it: dementia, psychiatric issues, or some other form of mental incapacity.
This is often a battle of the experts: your doctors or mental health professionals arguing that the principal is incompetent, while the agent lines up his or her own experts.
2. Were the Formalities Followed?
There are a number of formalities, which vary by state, that must be followed, in order to have a binding POA. A few to keep an eye out for are:
- Specific language that's required by state law;
- Signature or witness requirements (some states require one or more witness, others might require none); and
- Notarization requirements.
Unfortunately, that's about as specific as we can get. Every state has its own rules, in the statutes and in decades of court decisions, which local attorneys and judges are far more familiar with.
3. Abuse of Authority by the Agent.
Even if all the boxes are checked, the letters dotted and crossed, and notary seals affixed, a POA can still be invalidated if the agent is abusing his or her authority. Examples might include:
- Stealing from the principal's assets;
- Mismanaging the assets; or
- Neglecting the principal's needs entirely.
Again, much like the "battle of the experts" above, this often turns into a he-said, she-said battle that is best undertaken by those most familiar with the types of abuses that will force a court's hand.
An experienced lawyer has obviously been there, and done that, and will have a much better idea of what it takes to get a judge to invalidate a POA. An attorney can also line up experts to determine the principal's mental competence and can serve as a go-between in what is often a nasty, contentious battle between family members.
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